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I'm not sure of the exact terminology here as I'm not a network pro but I've run into this issue a couple of times as a developer. Edits encouraged!

If I create a virtual machine on a desktop and add it to active directory and then distribute the VM to other network users to use, how do we mitigate active directory (SID) conflicts?

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Easiest method is to run newsid.exe from Sysinternals on each distributed VM. It changes the SID (and optionally renames the PC) so conflicts don't occur. It's best to create the VM while the guest is an a Workgroup. Then distribute the VM, run newsid.exe and then add the guest to the domain.

Alternatively you can use Sysprep to prepare the VM, it achieves the same thing and is more of an automated process.

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You should always create a master image using sysprep and then use it as a part of the VM library. If you are using SCVMM, it becomes easy to perform an action like this. You can have the VM templates/clones added to the SCVMM library and then deploy it on a need basis.

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