Sysprep Windows Server 2008 R2 and use Windows Server Backup

Windows Server 2008 R2 comes with sysprep pre-installed – it is at c:\windows\system32\sysprep\sysprep.exe – best to run it from an elevated command line.

If you are looking to create a sysprepped image using the built in Windows Server Backup, you will be sorely disappointed – WSB does not run after running sysprep (if you choose the Exit option) – in fact very little will run.

The workaround is simple but non-intuitive (backup first; sysprep second):
1: Run the backup first.
2: Load the backup on a different machine (or virtual machine).
3: On first boot, ensure the network is disconnected!!
4. Run sysprep (be sure to select generalize) and have it reboot.
5. Repeat as needed.

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