One of the most asked questions lately by partners and customers when it come to VMware View 4.6 Implementation (I believe its applicable for older versions of View as well) is that when creating a Windows 7 Desktop Pools that utilize Linked Clones & try to utilize Quick Prep the deployment of desktop fails at the customizing stage. In the other hand, if they use SysPrep instead of Quick Prep the Desktop Deployment succeed & Desktops work normally though its much slower than Quick Prep can customize a Desktop VM. Further, Windows XP Pools work just fine with Quick Prep at the same setup. To be honest this has hit me before and that how I found out the solution.

In most cases the Quick Prep fail with Windows 7 due to the way Microsoft handle License Activation in Windows 7. As per VMware KB 1026556

== VMware KB 1026556 Quote Start  ==

“By default, the View Composer QuickPrep process uses Microsoft Key Management Service (KMS) to activate Windows 7 and Windows Vista guest operating systems. To make sure that View Composer properly activates the operating systems on linked-clone desktops, you must use KMS license activation on the parent virtual machine.

QuickPrep does not use other volume activation methods such as Multiple Activation Key (MAK) licensing.

If you are using MAK based licensing, you may not be able to deploy pools and you may see this error when deployment fails:  view composer agent initialization error (16): Failed to activate software license (waited 0 seconds).

Caution: View Composer does not support MAK license activation. Use MAK license activation at your own risk. For example, each recompose operation can increase the MAK license count, which can result in the unexpected depletion of MAK licenses.”

== VMware KB 1026556 Quote End ==

Putting the above in a simple words, in order for VMware View Quick Prep to work with Windows 7 you will need to have a KMS License Activation server in your environment, as well you will need to activate your parent VM using that KMS License Activation server. An Explanation of KMS can be found at the following document on Microsoft website.

download.microsoft.com/download/6/9/5/695ba00d-c790-4c90-813a-f10539d97991/volume_activation_2.0_mak_kms_key.doc

Although Microsoft has other methods of Volume License activation like MAK (Multiple Activation Keys), the only currently supported method in VMware View 4.6 is KMS. That means if you are going to run VMware View 4.6 in production and need a supported environment then you will need to setup a KMS server and utilize it as the method to activate your Windows 7 Desktop VMs. This should resolve your Quick Prep problem related to this specific case.

As usual working & supported are two different things. You might get stuck at a proof of concept or a testing environment where KMS server does not exist, and the customer admin is not ready to setup a KMS server just for this POC then there is a work around for that. You can get VMware View to utilize MAK activation or even skip the activation part all together this is done by a simple change to registry keys as explained below, though its important to remember neither is supported in a production environment (though both of them work as far my testing go).

To enable QuickPrep to activate licenses for MAK clients:

1. In the guest operating system on the parent virtual machine, start the Windows Registry Editor and navigate to this registry key:HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\vmware-viewcomposer-ga
2. Navigate to the AllowActivateMAKLicense registry value. The default value is 0.
3. Set the value to 1.

To bypass license activation by QuickPrep:

1. In the guest operating system on the parent virtual machine, start the Windows Registry Editor and navigate to this registry key:HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\vmware-viewcomposer-ga
2. Navigate to the SkipLicenseActivation registry value. The default value is 0.
3. Set the value to 1.

Either of the above should get you up and running for a VMware View 4.6 Proof of Concept(POC) or testing environment. Actually this is one of the trick I use on regular basis when carrying out a VMware View 4.6 POC, as many companies still do manual Windows 7 activation and just asking the admin to setup MKS server to be able to proceed with the VMware View Proof of Concept could just delay it or even cancel the whole idea. Therefore this trick has came handy so many times that you can not imagine. I hope this help you fix your problem for a production setup using MKS server of in a POC/Testing environment using the registry keys tricks.

Sources: In this article I have made a good use of the info published in VMware KB Article: 1026556 and its originally where I have found the resolution for this problem. This KB can be found at: http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1026556