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Cloned Virtual Machines Do Not Contain DNS Suffix (1004299)

Details

If a virtual machine with a  non-volume-licensed product key (MSDN or Retail product key) is cloned, and if its DNS suffix or WINS settings are changed in the clone wizard,  the customized DNS suffix or WINS settings might be missing in the cloned virtual machine.

Solution

This is a known issue. You need to correct the settings after the cloned virtual machine is powered on for the first time.
This issue might arise because network customization is done after the Sysprep's mini-setup when the cloned virtual machine is powered on for the first time. If the virtual machine is required to go through activation first, then Sysprep does not complete the network customization.
Sysprep is a Microsoft tool for automating the deployment of Windows. For more information on Microsoft product activation, refer http://www.microsoft.com/licensing/resources/vol/default.mspx
If a volume-licensed product key is used to activate the cloned virtual machine, this issue will not occur.

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