Step 1.
Identify one computer to be your KMS host. The host computer must be running one of the following operating systems:

  • Windows 7 (Volume License)
  • Windows Server 2008 R2
  • Windows Server 2003 Service Pack 2 (SP2)

*Windows 2008 is not supported
*Windows SBS2003 is not supported

Windows 2003 is unique in that it requires additional updates before Office 2010 KMS will function.
If you are not using Windows 2003 skip to step #4.

Step 2.
Install KMS and KMS update 1.1 for Windows 2003 from here: 

An update is available that installs Key Management Service 1.1 for Windows Server 2003 Service Pack 1 (SP1) and later versions
http://support.microsoft.com/kb/948003

  • Use the Kmsw2k3.exe file to install KMS 1.0 for Windows Server 2003 if it is not already installed. (Kmsw2k3.exe is included in the download from KB948003)
  • Run the KB948003.exe update file. (Also included in the download from KB948003)

Step 3. 
Download and install KMS 1.2 for Windows 2003 from here:

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
http://support.microsoft.com/kb/968915

  • Run the KB968915.exe update file.
  • Restart the computer

    Note If you do not restart the computer after you install the KB968915.exe file, you may receive the following error message when you enter the product key:
    Error: 0xc004f050 The Software Licensing service reported that the product key is invalid

* KMS 1.2 for Windows 2003 is NOT required for Office 2010 KMS. We typically recommend that you install the 1.2 update however. It will add the functionality to activate VL versions of Win7 and 2008 R2

Step 4.
Download and install the Microsoft Office 2010 KMS Host License Pack from here:  

Microsoft Office 2010 KMS Host License Pack
http://www.microsoft.com/downloads/details.aspx?FamilyID=97b7b710-6831-4ce5-9ff5-fdc21fe8d965&displaylang=en

* There is a Beta version of the 2010 KMS host license Pack. Ensure that you are using the RTM version from the link above, or you will receive an “invalid product key” error when inputting your RTM KMS 2010 key.

During the installation of the Office 2010 KMS host License pack, it will ask you for your Office 2010 KMS key. Enter the key at that time. It should then activate if you have an internet connection.

Step 5.
If your firewall is enabled, ensure that it has an exception set for port 1688. By default KMS will use port 1688. If this port is being blocked by your firewall Office 2010 clients will fail to activate. 

To do this on Windows 7 or Windows Server 2008 R2:

  1. Open Control Panel and click Windows Firewall.
  2. Click Allow a program through Windows Firewall.
  3. Click Change Settings.
  4. Select the Key Management Service check box, and then click OK.

Step 6.
Verify that the DNS entry for KMS was generated as expected. Go to the DNS console in your domain and verify that you have an _VLMCS entry for KMS in the _TCP node for your domain.  Verify that the _VLMCS entry is pointing to the correct machine. Also, if you have more than one _VLMCS entry this can cause conflicts. You may want to remove the incorrect entries to ensure that the Office 2010 client is able to find your KMS server successfully. 

Capture

Step 7.
Run SLMGR on the KMS server to verify that the Office 2010 license pack is showing up as licensed.

Open a command prompt and change the directory to c:\windows\system32.
Type in “cscript slmgr.vbs /dlv all” and hit enter.

You will see all of the license files that have been installed on your KMS server. You will want to scroll through to find the Office KMS 2010 entry.

Capture1

Notice that the Current count is 0. Office 2010 will not start activating until the KMS host has received requests from 5 unique machines.

Step 8.
On a machine which has had Office 2010 installed with a generic KMS key, open office. It should complain that activation failed. This is ok. Check the KMS host again on the server.

* Now that we have run SLMGR.VBS once already and identified the Office piece we can now copy down the activation ID and run a query for only the Office 2010 host by referencing the activation ID rather than using the “all” variable. Example:

Capture2

Notice the Current count now equals 1. This means that one machine has attempted activation. Keep in mind however that the KMS host will not start activating the Office 2010 clients until it has received 5 unique requests. Once you install Office 2010 on 4 other machines and open office on those machines to get the current count to 5, all additional Office 2010 clients will activate as expected.

*Hint*
You can examine the eventvwr log named “Key Management Service” to identify which machines have attempted to activate against the KMS server.

Common Issues:

Issue:
When entering the KMS key getting an error that the key is not valid.

Causes:
1. The key is not a valid Office KMS key.
2. Windows 2003 KMS server does not have KMS 1.1 update installed (or has not been reboot since installing 1.1 update.)
3. The key has been entered with a trailing space.
4. The beta version of the KMS server was installed rather than the RTM version. (See step 4 above)

Issue:
When activating Office 2010 you receive the ERROR CODE: 0x80070005

Issue:
When attempting to activate Office 2010 receiving error "An unspecified error has occurred. Your request cannot be processed at this time. Please try again later. (0x80070001)"

Issue:
0xC004F038 The software Licensing Service reported that the computer could not be activated. The count reported by your Key Management Service (KMS) is insufficient. Please contact your system administrator.



-Here is a video demonstration of the installation steps provided in this post-

Format: wmv
Duration: