When deploying a Windows Server 2025 VM from a template, VM Customization Specifications are not working

Products

• VMware vCenter Server

Issue/Introduction

After deploying a Windows Server 2025 VM from a template, the VM's DNS/SID does not change from the template's original value. 

Cause

When running sysprep.exe from the Guest OS, you receive an error: "Sysprep was not able to validate your Windows installation. Review the log file at %windir%System32\Sysprep\Panther\setupact.log for details".

Resolution

Contact Microsoft Support for assistance with this issue in the Guest OS. 

Additional Information

Error "A fatal error occurred while trying to sysprep the machine" when you use the Sysprep tool