KMS in a workgroup environment

First of all update all necessary fixes if your KMS host is running on Windows 2003 or Windows 2008.  

If you are running Windows Server 2003 as your KMS host you need this update:
968915  An update is available that installs Key Management Service (KMS) 1.2 for Windows Server 2003 Service Pack 1 (S968915) and for later versions of Windows Server 2003

If you are running Windows Server 2008 as your KMS host you need this update: 
968912  An update is available for Windows Vista and for Windows Server 2008 to extend KMS activation support for Windows 7 and for Windows Server 2008 R2

Next step is to synchronize time among all servers and clients.

Make sure that the system time on client and KMS host is the same. The time zone that is set on the client computer does not affect Activation, since that is based on UTC time. You can use w32tm utility for this purpose.

As the next step, open the required Firewall ports.  Default TCP port 1688. And then follow the subsequent steps...

Configure Slmgr.vbs to Run Against Computers in a Workgroup (on KMS host)
a. Log on to the KMS client computer.
b. Open an elevated command prompt to Run As Admin. To do this, click Start, click All Programs, click Accessories, right-click Command Prompt, and then click Run as administrator.

c. At the command prompt, type one of the following options and press Enter:
a) To assign a KMS host using the host's FQDN, type:
cscript \windows\system32\slmgr.vbs /skms <KMS_FQDN>:<port>
b) To assign a KMS host using the host's version 4 IP address, type:
cscript \windows\system32\slmgr.vbs /skms <IPv4Address><:port>
c) To assign a KMS host using the host's version 6 IP address, type:
cscript \windows\system32\slmgr.vbs /skms <IPv6Address><:port>
d) To assign a KMS host using the host's NETBIOS name, type:
cscript \windows\system32\slmgr.vbs /skms <NetbiosName><:port>

Manually Activate a KMS Client
To activate a KMS client manually using the Slmgr.vbs script
a. Log on to the KMS client computer.

b. Open an elevated command prompt. To do this, click Start, click All Programs, click Accessories, right-click Command Prompt, and then click Run as administrator.

c. At the command prompt, type the following, and then press Enter:
cscript \windows\system32\slmgr.vbs /ato
The script reports activation success or failure, along with a result code.