Organizations with volume license agreements with Microsoft will find they will need to implement a central Key Management Service (KMS) to activate-- and even to maintain these activations for Vista PC and Windows Server 2008 systems. It has always been the "gold disk" or volume license product keys that have found there way to the outside to be used again and again by anyone that stumbles upon some shady site sharing them with the world. Microsoft stands to make up considerable money lost to this activity through this new strategy. However, they needed to implement something that would be of minimal impact to their legitimate volume license customers. The solution is KMS (for both volume license keys (VLKs) and multiple activation keys (MAK)) which will provide activation services. The major difference between the MAK and the VAK is that the MAK requires a one-time activation only. The VAKs require re-activation every 180 days. The most important differentiation is that MAK also requires a communication with Microsoft whereas VAKs never require access to Microsoft’s activation Web site. This is very important for disconnected networks as MAK licenses are not functional without at least some level of Internet connectivity.

While you do not need a KMS server if you are using MAKs, you will need one if you are using VAKs.

Those of you annoyed by the whole activation requirement will be happy to hear that as of now 2007 Microsoft Office system will continue to use product keys that bypass product activation (Volume Activation 1.0 (VA 1.0))