Q. If I'm using vSphere Virtual Center but still have 3.5 ESX hosts, do I still need a License Server?

A. vSphere uses a new centralized license reporting and management structure, which means that if all ESX hosts are upgraded to version 4, no license server or host license file is needed. ESX 3.5 hosts still require access to a license server, which can be used by the vSphere Virtual Center by configuring the License Server option under Administration—Server Settings, as shown here.

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