Correct Answer:
Explanation/Reference:
http://technet.microsoft.com/en-us/library/gg697604.aspx
The following are some considerations about using distributed key management in VMM:
If you are installing a highly available VMM management server, you must use distributed key management to store encryption keys in AD DS.
Distributed key management is required in this scenario because when the Virtual Machine Manager service fails over to another node in the cluster, the Virtual Machine Manager service still needs access to the encryption keys in order to access data in the VMM database. This is only possible if the encryption keys are stored in a central location like ADDS.
For future upgrades that involve Virtual Machine Roles, it is recommended that you use distributed key management during setup. This will ensure that Virtual Machine Roles are properly upgraded, and that you can manage them after the upgrade.
You must create a container in AD DS before installing VMM. You can create the container by using ADSI Edit.
You must create the container in the same domain as the user account with which you are installing VMM. Also, if you specify a domain account to be used by the System Center Virtual Machine Manager service, that account must also be in the same domain. For example, if the installation account and the service account are both in thecorp.contoso.com domain, you must create the container in that domain. So, if you want to create a container named VMMDKM, you would specify the container location as CN=VMMDKM,DC=corp,DC=contoso,DC=com.
After the Active Directory administrator has created the container, the account with which you are installing VMM must be given Full Control permissions to the container in AD DS.
Also, the permissions must apply to This object and all descendant objects of the container.
On the Configure service account and distributed key management page, you must specify the location of the container in AD DS by typing. For example, by typing
CN=VMMDKM,DC=corp,DC=contoso,DC=com.
