Configuring vTPM with vSphere Native Key Provider results in the following errors:
Task Name: Reconfigure virtual machine OR Configure the host keyStatus: A general runtime error occurred. Key provider <key provider name> is not compatible with host <host-fqdn> Reason: "the host does not support Native Key Provider."
Or
Task Name: Reconfigure virtual machine OR Configure the host keyStatus: A general runtime error occurred. Key provider <key provider name> is not compatible with host <host-fqdn> Reason: "The host does not support Native Key Provider because it is not in a cluster."
The log entries found in the vCenter Server - /var/log/vmware/vpxd/vpxd.log:[YYYY-MM-DDTHH:MM] error vpxd[16918] [Originator@6876 sub=CryptoManager opID=lw6e2al5-xxxx-auto-1c8u-h5:xxxxxxxx-84] [vim.HostSystem:<host-moid>,<host-fqdn>] is not compatible with key provider TestKeyProvider: native key providers not supported.[YYYY-MM-DDTHH:MM] error vpxd[16918] [Originator@6876 sub=CryptoManager opID=lw6e2al5-xxxx-auto-1c8u-h5:xxxxxxxx-84] Trusted Key Provider is not compatible with host: com.vmware.vim.vpxd.encryption.NativeKeyProviderNotSupported[YYYY-MM-DDTHH:MM] info vpxd[16918] [Originator@6876 sub=Default opID=lw6e2al5-xxxx-auto-1c8u-h5:xxxxxxxx-84] [VpxLRO] -- ERROR task-48721 -- <host-moid> -- vim.HostSystem.configureCryptoKey: vmodl.RuntimeFault:--> Result:--> (vmodl.RuntimeFault) {--> faultCause = (vmodl.MethodFault) null,--> faultMessage = (vmodl.LocalizableMessage) [--> (vmodl.LocalizableMessage) {--> key = "com.vmware.vim.vpxd.encryption.kmsNotCompatibleWithHost",--> arg = (vmodl.KeyAnyValue) [--> (vmodl.KeyAnyValue) {--> key = "keyProviderId",--> value = "TestKeyProvider"--> },--> (vmodl.KeyAnyValue) {--> key = "host",--> value = "<host-fqdn>"--> },--> (vmodl.KeyAnyValue) {--> key = "reason",--> value = "vim.vpxd.encryption.NativeKeyProviderNotSupported"--> }--> ],--> message = <unset>--> }--> ]--> msg = ""--> }--> Args:-->--> Arg keyId:-->
vCenter Server 8.x
vCenter Server 7.x
A standalone host cannot use Native Key Provider (NKP) for vTPM or VM encryption.
To resolve the issue add the host to a cluster,
Once the host is in a cluster with Native Key Provider (NKP) enabled, edit the VM settings and add a vTPM device.
Refer to the following document for instructions on how to add an ESXi host to a cluster. Adding Hosts to a Cluster