KMS 1.2 recommended for setting up an Office 2010 KMS host on Windows Server 2003

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To set up an Office 2010 KMS host on Windows Server 2003, you must install Key Management Service (KMS). Although the minimum required version is KMS 1.1, we highly recommend that you install KMS 1.2, which recognizes virtual computers as part of the activation count.

To install KMS 1.2, follow the instructions in Microsoft Knowledge Base article 968915: An update is available that installs Key Management Service (KMS) 1.2 for Windows Server 2003 Service Pack 2 (SP2) and for later versions of Windows Server 2003.

Note that for KMS 1.2, Windows Server 2003 must have at least SP2 installed.