Volume activation - Volume Activation allows volume license customers to automate the activation process so that it is transparent to users. Volume Activation applies to computers that are covered under a Volume Licensing program. It is used strictly as a tool for activation, and it is not tied to license invoicing or billing.
Starting with Windows 8 and Windows 2012, you can use Active Directory Based Activation (ADBA) method for volume activation in addition to existing volume activation methods i.e. Key Management System (KMS) and Multiple Activation Key (MAK). This article provide brief details on various existing methods with the detailed description on Active Directory Based Activation.
Key Management Service - With KMS, IT pros can complete activations on their local network, eliminating the need for individual computers to connect to Microsoft for product activation. KMS is a lightweight service that does not require a dedicated system and can easily be co-hosted on a system that provides other services. By default, volume editions of Windows 7 and Windows Server 2008 R2 connect to a system that hosts the KMS service to request activation. No action is required from the user. KMS activation can be used for machines joined to the domain as well as machine which are part of workgroup.
KMS requires a minimum number of computers (physical or virtual machines) in a network environment. The organization must have at least five computers to activate Windows Server 2008 R2 and at least 25 computers to activate clients that are running Windows 7. These minimums are referred to as activation thresholds.
To use KMS activation with Windows 7, the computer must have the qualifying OS license (often obtained through OEMs as part of the new PC purchase) and contain a Windows Marker in BIOS.
Multiple Activation Key - MAK is used for one-time activation with Microsoft’s hosted activation services. There are two ways to activate computers using MAK. The first method is MAK Independent activation, which requires that each computer independently connect and be activated with Microsoft either over the Internet or by telephone. The second method is MAK Proxy activation. With this method, a computer acting as a MAK proxy gathers activation information from multiple computers on the network, and then sends a centralized activation request on their behalf. MAK Proxy activation is configured using the Volume Activation Management Tool (VAMT).
Active Directory Based Activation - ADBA is a new feature in Windows 2012 and can be used to activate computers running Windows 8 / Windows 2012 or higher operating system. So if you only have clients running Win 8 / Win 2012 in your environment, ADBA provides much simpler option for volume activation.
With ADBA, any client computer gets activated automatically when it is joined to the domain. Activation will cease if the client computer is disjoined from the domain or if the client computer is not able to communicate to the domain controller for 180 days. As ADBA doesn't have option to activate the computers in workgroup, you need to look at some other options ( MAK/phone/KMS activation ) for workgroup computers.
Important things to remember while working with ADBA: