Key Management Service or KMS is a part of Volume Licensing for Windows Activation. When activating your Windows, if you get an error code 0xC004F038 with the message,



The Software Protection Service reported that the computer could not be activated. The count reported by your Key Management Service (KMS) is insufficient. Please contact your system administrator. 0xC004F038,

this means that the KMS has failed to meet the minimum criteria.

Microsoft had made sure when Volume licensing is used, they are activated with a minimum number of the device to start with. When using KMS, there should be a minimum of 5 computes already activated and for Windows Servers that 25. This also means that at start these are the minimum computers that should get activated.

If you think you have already met that numbers, then run Slmgr.vbs /dli to get the current count on the KMS host.