vCenter triggers the alarm: "License assignment failed for this host" when a host is restarted.

Products

• VMware vSphere ESXi

Issue/Introduction

• After initiating a reboot of an ESXi host (e.g., for firmware updates or maintenance), vCenter triggers the alarm: "License assignment failed for this host".
  
• The alarm typically triggers while the host is in a "Not Responding" state during the boot sequence.
• vCenter vpxd.log shows repeated HTTP 503 Service Unavailable errors when attempting to contact the host's VAPI provider:
  

  WARNING vpxd #### [vc@#### sub="licenseClient" opID="LicenseUtilRunOnTimer-#######"] VAPI provider failed; </hgw/host-##>, /api, Error:
  -->    system_error
  --> Messages:
  -->    vapi.invalid.result.code<Recv of frame failed with code: 503 Service Unavailable>
  --> , bt:
  --> [context]################################################################################################################################[/context]
  WARNING vpxd #### [vc@#### sub="licenseClient" opID="LicenseUtilRunOnTimer-#######"] Failed request to VAPI service; Error:
  -->    system_error
  --> Messages:
  -->    vapi.invalid.result.code<Recv of frame failed with code: 503 Service Unavailable>
  --> , bt:
  --> [context]################################################################################################################################[/context]
  ERROR vpxd #### [vc@#### sub="licenseClient" opID="LicenseUtilRunOnTimer-#######"] Failed to list the entitlements from host:  host-##, N4Vpxd7Clients19ErrorValueExceptionE(Error:
  -->    system_error
  --> Messages:
  -->    vapi.invalid.result.code<Recv of frame failed with code: 503 Service Unavailable>
  --> )
  --> [context]################################################################################################################################[/context]
  INFO vpxd #### [vc@#### sub="licenseClient" opID="LicenseUtilRunOnTimer-#######"] Schedule com.vmware.license.HostRejectedLicenseEvent for: vim.HostSystem:host-##
  ERROR vpxd #### [vc@#### sub="licenseClient" opID="LicenseUtilRunOnTimer-#######"] License was unsuccessfully set on host: host-## with error: Error:
  -->    system_error
  --> Messages:
  -->    vapi.invalid.result.code<Recv of frame failed with code: 503 Service Unavailable>
  -->
  

Environment

VCF 9.1
VMware vCenter Server 9.1
VMware ESXi 9.1

Cause

This is a known defect in the vCenter license polling logic.

While a host is rebooting, its services are temporarily unavailable. vCenter continues to poll the host for license entitlements during this window.
If the host takes longer than expected to initialize its services, vCenter fails to receive a valid response and incorrectly triggers the "License assignment failed" alarm.

This issue is specifically prevalent in environments with extended boot times (e.g., heavy hardware initialization or firmware checks).

Resolution

This alarm is a false positive and does not impact the actual licensing state or functionality of the host once it has fully booted and reconnected to vCenter.

Workaround

1. Wait for the ESXi host to complete its boot sequence and return to a "Connected" state.
2. Verify that the host shows as properly licensed under Host > Configure > Licensing.
3. Manually Acknowledge or Reset to Green the alarm in vCenter.

Permanent Fix

Engineering is aware of this issue. A permanent fix is scheduled for the future release.

Additional Information

ESXi 9.1 Upgrade Triggers Temporary License Assignment Failed for this Host Warning