The Dynamic Host Configuration Protocol (DHCP) is an Internet standard for allocating reusable Internet addresses. When a computer boots using DHCP it broadcasts a request for an Internet address. The DHCP server allocates a free address from its pool and gives it to the computer. (The DHCP server also responds with the address of the local DNS server.)
The advantage of DHCP is that it removes the need to manually assign Internet addresses to new computers. The disadvantage is that it can make it harder to find computers that provide services.
Using Client DHCP on a Domain Controller
While DHCP is useful for member computers, it is problematic for Windows servers, and it can be especially harmful for DNS servers and Active Directory domain controllers. In general you should not use client DHCP on servers.
To locate an Active Directory domain controller, other computers must query DNS. The DNS and DHCP servers are not synchronized with each other. When the DHCP server hands out an Internet address it does not inform the local DNS server of the new assignment.
The booting computer is responsible for notifying DNS of its new Internet address (via dynamic DNS registration). But what if the booting computer is the DNS server itself? What if it uses integrated DNS -- meaning that AD holds the DNS records? How can it contact AD to query its own Internet address when it does not have an address yet? A classic chicken-and-egg problem arises.
Problem: Moving a computer that depends on client DHCP
When a computer registers itself with DHCP, the DHCP server will try to reserve the same Internet address for the same computer. As long as the computer is running, the DHCP server will renew the same Internet address indefinitely.
The DHCP server reserves the Internet address by tracking the hardware Media Access (MAC) address of the client's network interface connection (NIC). If a DHCP client computer crashes and reboots, the DHCP server will look up the MAC address in its database and will re-issue the same Internet address.
A Windows server usually runs 24 hours a day. So it will continue getting the same Internet address indefinitely, sometimes for years, with no apparent problem.
Now suppose the server's hardware fails, so you must move Active Directory to a new computer. U-Move happily moves the identity of the domain controller to the new physical computer. But the new computer has a different MAC hardware address. So the DHCP server will assign a different Internet address.
Suddenly your whole network stops working. The old Internet address (that worked for years) will no longer respond. It may be hard-coded in many places. Client computers may have hard-coded the old Internet address in their Control Panel setup. It may be hard coded in HOSTS files, or in in static DNS records or WINS records.
This is why you should avoid using DHCP on servers.
Planning: Avoid DHCP
Planning Step: If you are doing a planned upgrade, you should first change all of your domain controllers and DNS servers to use a fixed Internet address. To limit impact on your network, use the current address that the DHCP server assigned to the computer. Next, remove the address from the DHCP pool so that it is not accidentally assigned to another computer.
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