Cannot license your ESX host or connect ESX host to vCenter Server after converting a vSphere license from Enterprise or Enterprise Plus to a lower edition

Symptoms

If you convert your vSphere licensing model from Enterprise or Enterprise Plus to a lower edition, you may experience these symptoms:
  • You cannot license your ESX 4.0 host.
  • When you try to license your ESX 4.0 host, you see the error:

    Features in use - vMotion/Fault Tolerance
     
  • You cannot connect an ESX host to vCenter Server. 
  • When you try to connect an ESX host to vCenter Server, you see the error: 

    License not available to perform the operation. The vSphere 4 standard license for host <host> does not include vmotion. Upgrade the license.
     
  • If you connect directly to the host using vSphere Client, the Licensed Features indicate that the host is not using a vMotion license.
  • This issue occurs even though the license key has been verified and vCenter License Manager indicates that it is in use.


Resolution

Features like vMotion and Fault Tolerance are only available with Enterprise and Enterprise Plus licenses.
 
This issue occurs if you switch to a vSphere Standard or Essentials license and a VMkernel Port Group still has vMotion or Fault Tolerance enabled.

Note: vSphere Standard 4.1 contains vMotion, but not Fault Tolerance.
 
To resolve this issue, you must disable vMotion and Fault Tolerance on the VMkernel Port Group.
 
To disable vMotion and Fault Tolerance: 
  1. Log in to the ESX 4.0 host that you are trying to license directly using vSphere Client.
  2. On the Configuration tab, click Networking.  
  3. Click Virtual Switch to display the virtual switches for the host.
  4. Locate the virtual switch that has a VMkernel port group configured for vMotion, and click the Properties link.
  5. On the Ports tab, choose the port group that is configured for vMotion and click Edit.
  6. On the General tab, deselect Enabled for vMotion or Fault Tolerance.
  7. Click OK to close the port group Properties dialog, and click Close to close the vSwitch Properties dialog.
Based on VMware KB 1017843
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