License Issue for VM after conversion (P2V) or Clone

Is it necessary to provide or validate a new license for the OS (e.g.Windows 2008 R2 or Windows 7) after converting from P2V or Cloning the VM?

If we do not provide a new license it means we are technically using 2 or more machines with the same license!
Is this  technically correct from Microsoft view point? What are the implications If we continue using the same license on more than one machine.  
Is there any other better way to handle this and not get into problems.  Thanks.
cgeorgeisaacAsked:
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
There are two functions you have mentioned in your post, P2V and CLONING.

P2V
In the VMware world, if you perform a P2V, it is usual to retire or scrap the original physical computer, and the remaining computer is the Virtual version, depnding upon what type of license your physical computer had e.g. Volume, Retail this is allowed, OEM licenses are not transferable (depending upon which Country you reside in, because the license was supplied with the hardware, and if you scrap the hardware, the license is also scraped, as it's allocated to the hardware, the OS was installed on).

CLONING
Usually this means, the rapid deployment of computer OS, computer, using an existing computer, physical or virtual as a template.

If both computers are in Production, you will require a license for both, either retail, or volume.

So back to your question...

Is it necessary to provide or validate a new license for the OS (e.g.Windows 2008 R2 or Windows 7) after converting from P2V or Cloning the VM?

Depends, P2V - maybe transferable, if you scrap/retire the old, cloning both in production, you will needed new license.

If we do not provide a new license it means we are technically using 2 or more machines with the same license!

Correct and in breach of the Microsoft license agreement.

Is this  technically correct from Microsoft view point? What are the implications If we continue using the same license on more than one machine.  

breach of the Microsoft license agreement. and you will find, you cannot Activate the license on all of your computers, and Microsoft will know.

Is there any other better way to handle this and not get into problems.  Thanks.

Purchase Retail, Volume licenses, or purchase Windows Server 2012 Datacentre licenses for all your hosts, you will then be covered and able to run as many VMs as you like. (Server licenses!)

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cgeorgeisaacAuthor Commented:
Well Explained. Thank you.
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