A bug in VMware's newest software update has blocked corporate users from starting their virtualised servers. The company has confirmed the flaw and said its ESX 3.5 Update 2 and ESXi Server 3.5 Update 2 hypervisors were affected.

The flaw, which appears to be only in Update 2, which was released about two-and-a-half weeks ago, prevents virtual servers from powering up, according to user reports. "Starting this morning, we could not power on nor VMotion any of our Virtual Machines," said someone identified as "mattjk" on a VMware support forum. "The VI Client threw the error 'A general system error occurred: Internal Error'." After digging into the virtual server log files, mattjk found notes indicating that VMware's software thought its licence had expired. "This product has expired. Be sure that your host machine's date and time are set correctly," the log files read.

The date-related bug is triggered Tuesday, 12 August, mattjk and other users said. "Also in Australia and experiencing the same issue just as you have described," noted "McBain."

Mattjk suggested a workaround that involves disabling NTP (Network Time Protocol) and manually setting the date of all hosts back several days. "This can be done either through the VI Client (Host -> Configuration -> Time Configuration) or by typing date -s "08/10/2008" at the Service Console command line on the ESX hosts," he said.

VMware has pulled Update 2 from its download site;, the normal location simply read "Temporarily unavailable."

An issue has been uncovered with ESX 3.5 Update 2 and ESXi 3.5 that causes the product licence to expire on August 12," said a company spokesman, and added that VMware was notifying customers who had downloaded and installed the buggy versions.

"Updated product bits with correct licensing will be made available for download as soon as possible," the spokesman said, adding that VMware expected to have a patch available shortly.