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We have a vCenter 4.0 Server with two ESX 4.0 hosts. We have a vCenter Server 4 Foundation license and a vSphere 4 Advanced 6CPU license. Licenses have been assigned to the server and hosts (each host has two CPUs leaving 2 unassigned on the vSphere license.)

The licenses are applied successfully via the vCenter license management interface, then moments later each host displays the following error on the Summary page:

Configuration Issues License assignment on the host fails. Reasons: The license key can not be assigned.

Configuration Issues error message

What causes this error and how can it be resolved?

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Have you checked the licenses on VMware's License Portal to make sure the keys you have are the license keys you believe they should be?

Are you making use of any critical features (e.g. Service console on a distributed Switch) that might be disabled if the restrictions associated with your actual license were applied? Is your whole environment operating under eval licenses a the moment?

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The keys do check out on the license portal. We are not operating under eval licenses now, the strange thing is that vCenter allowed the licenses to be applied, then moments later the warning appears. The server is behind a proxy to the internet - could it be an internet communications problem verifying the licenses? – Aidan Ryan Nov 2 '09 at 13:00
up vote 1 down vote accepted

It turns out we had deployed an older build of ESX to our hosts. Another symptom of this problem was that the vmware-hostd would not start on the hosts after applying all updates via Update Manager.

We rebuilt the hosts with the latest available build. The license error no longer appeared and updates were successfully applied.

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Interesting issue - were you upgrading from a previous production version when this happened or one of the pre-production build releases? – Helvick Nov 4 '09 at 13:56
Upgrading frmo an earlier production version. I think you can see the build number in the screenshot above. – Aidan Ryan Nov 6 '09 at 11:03

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