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I have a x64 2003 server and want to upgrade to x64 2008 server. Can this be done as an inplace upgrade or do I need to blow the machine away with a fresh OS install? The 2003 machine has SQL, IIS, and several VMs.

What are my options? What are pros and cons for in-place upgrade vs new install?

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If it's SP2 R2 you can do an in-place upgrade (I believe). However, I can not stress strongly enough what a bad idea this is. A fresh build is the best way forward

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    Agreed. Too many horror stories start with "this will be so quick & easy if I can pull off the upgrade..." Aug 20, 2009 at 16:03
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Only do an in-place upgrade for the following scenarios:

1) The server has a very plain vanilla configuration with all the defaults still set and no additional software is installed.

2) The cost of re-configuring the server after a clean-install outweighs the cost of having to iron out any legacy 2003 settings that may have adverse effects in 2008.

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I did an in-place upgrade of 2003 R2 x64 to 2008 x64 because it was in the datacenter and I wanted to minimize my time in the batcave. It had SQL Server and some other little things on it; 6 months later, no difficulties so far.

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I agree with O.S. Upgrades being a Bad Thing, particularly between really different systems like 2003 and 2008 (they're different just like XP and Vista, don't forget that).

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