Server 2008 KMS - Error code 0xC004F038

I am TRYING to go from Server 2003 to Server 2008, however it is frustrating.
We have 12 KMS licenses, and I installed it on a brand new, formatted HP
ProLiant system, x64. Standard Server 2008 X64 and it worked fine, it wanted
to register with Microsoft to authenticate, no problem, KMS key entered,
wait... wait.. bam, done! Excellent! Happy camper. THEN! I tried to do
the same for ANOTHER system, which is NOT our KMS server, but a "client."
It's the exact same hardware, it's exact in almost every way, but it's AD03
instead of AD04 (KMS) and it doesn't like the license when I try to find it.
I get:
Error code 0xC004F038
I went to: http://support.microsoft.com/kb/938450 and found:
Symptom
When you try to use a KMS client to activate one or more computers, you may
receive the following error message:
0xC004F038
The software Licensing Service reported that the computer could not be
activated. The count reported by your Key Management Service (KMS) is
insufficient. Please contact your system administrator.
Cause
This issue may occur if the client computer count on the KMS host is not
large enough. A minimum of 25 computers must be in the KMS pool.
Workaround
To work around this issue, you must add more computers to the KMS pool so
that the KMS clients can be activated. To determine how many computers are in
the KMS pool on the KMS host, run the following command at a command prompt:
Slmgr.vbs -dli
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We have 12 (TWELVE) licenses (For 2008 servers ONLY), that's ALL we can
afford, we're not rich! I do NOT know how to get the system to take the
license. Do I put in the KMS license Key?
((sidenote)) {I have tried that on a Microsoft Windows Vista SP0 Business
x86 system (to register other KMS Vista x86 systems) and it wanted me to CALL
Microsoft and register over the phone, the people weren't happy and wanted me
to continue to call Microsoft to get it resolved.}

I am just trying to figure out HOW to get these to work, IF they can work,
and if NOT, why was my manager given a KMS license that would NOT work?

The count for server is 5 not 25 so the article needs to be updated.
But you do need 5 KMS client servers to communicate to the KMS host machine
prior to being able to activate.
Standard or Enterprise?
From an elevated cmd prompt
What is the output from the KMS host machine of slmgr -dli

What is the output from the KMS client machine of slmgr -dli

xx out any internal server names from the output before posting.

I'm having the same issue. I am new to KMS and, I think my procurement guy didn't really understand what he was buying at the time. I have 2 seats of server 2008 listed in my volume license agreement. The server2008 machine that is the DC activated fine. The 2nd machine I brought online will not activate.

Do I need to buy 3 more licenses that I don't need to be able to activate the 2nd machine to reach the requisite 5 license count for servers?

Can I swap out the KMS license type for the old-school type of license that did not have this 5-seat limitation?

Update -

I went to the properties of Computer and "Changed Product Key". I put in the exact same key as the original engineer used to stage the machine. It requested activation...I clicked activate...it activated fine.

So, does this mean that I now have two KMS host servers on the domain? Should my licensing distributor have sold KMS licenses in the first place?

This is all very confusing.

You'll need to post the original thread because we can't see it in the
Microsoft public newsgroups because they expire after 90 days. Apparently
the original is older than 90 days. Keep in mind, Techarena's newsgroup
source are the Microsoft Newsgroups.

So not sure what the total issue is or was, but have you contacted your
distributor or channel partner asking this question?

I have a question. I get the same error with my 2008 SP2 box. I have
my KMS host at SP2 and activated it. I have another 2008 SP2 server
that says the count is insufficient. These are virtual machines. I
check the kms box and its count is 1. SP2 is supposed to allow virtual
machines in the count but its not working. I followed the Volume
Activation 2.0 guide and still no luck. Any ideas??

This area is not my forte. I would suggest and would be to your
advantage, starting a whole new thread, give it an appropriate subject
line, etc, so it will show up as a new thread and others will see it,
otherwise many folks may not see your reply to an older thread. Kind of
what I said to the other guy in this thread.

I would like and hope that you find a resolution.

I get the part about 5 connections to activate office 2010 but I don't know if it's 5 concurrent connections or 5 different machines connecting . I am using server 2008r2 and have the KMS host configures and have verified that the client is getting the key from the host but the error keeps coming up and I have 2 days left to activate All my users are loging onto the terminal server does this make a difference as they are not using theier local machine to activate???????????????
Frustrated

Quote:

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Originally Posted by techno1

I get the part about 5 connections to activate office 2010 but I don't know if it's 5 concurrent connections or 5 different machines connecting . I am using server 2008r2 and have the KMS host configures and have verified that the client is getting the key from the host but the error keeps coming up and I have 2 days left to activate All my users are loging onto the terminal server does this make a difference as they are not using theier local machine to activate???????????????
Frustrated

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Microsoft KMS activation for WIndows Server 2008 requires that there be at least 5 PHYSICAL machines running Server 2008 on the network. VM's don't count toward activation limits, even VMs hosted by VMware ESX (which is what I'm dealing with) and not simply 2008's Hyper-V. So use MAK Keys. For Volume Licensing (Open) MAK keys can be requested through https://eopen.microsoft.com.

Right click on My Computer --> Properties --> Change Product Key - enter your MAK product key and activate over the Internet, and hopefully problem will be solved.