Microsoft published a KB article that "describes how to successfully sequence Office 2010 for use with Application Virtualization. Office 2010 uses Office Software Protection Platform (SPP) service -- same activation technology used with volume editions of Vista and Windows 7. This service is contained in Office 2010 Deployment Kit for App-V. Before you sequence Office 2010, this service must be installed and configured on sequencing server. It must also be installed on any client computers that you want to stream Office 2010 to, explains Microsoft. [KB983462].
"Some users encountered following error during sequencing App-V package of Office 2010: "Microsoft Office has encountered a problem with licensing and will need to close. If this problem persists, uninstall and reinstall your product." Checking log (pic) revealed that "KMS server was set up & working fine for locally installed Office 2010. And command line to install proxies were fine too, but the customer was missing "initial ODK with licence flags option".
In addition to steps in kb983462, you must first install the ODK with licensing flags only: 1. Open command prompt with admin permissions 2. Browse to directory that contains Offvirt.msi 3. At command prompt, run following command: msiexec /i OffVirt.msi [licensing flags]. Note: enter correct licensing flag in following list to correctly configure ODK. Otherwise, functionality may be incorrect. And once licensing flag option is complete the offvirt.msi can be executed with proxies."