I have been spending so many cycle on this, here are the Testing Tasks around 
Ubuntu 16.04 Customization with Cloud-init on vSphere
and its expected behaviour


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- Create an Ubuntu 16.04 Virtual Machine on vSphere 6.7 U2.
- Apply the latest updates and upgrades -> sudo apt-get update && sudo apt-get 
upgrades

Environment Facts
- DHCP is available on the network when preparing the template and later for 
provisioning.
- Cloud Assembly Static IP range also available for vSphere deployments.

Test 1
=======
behavior for deploying VMs using DHCP from CAS before installing cloud-init

Tasks Invoked by vCenter

- Clone Virtual Machine from Template
- Reconfigure Virtual Machine
- Customize Virtual Machine Guest OS
- Power on Virtual Machine
        During the boot time the network state is Disconnected
- Customization Starts and Succeeds, listed in the VM Events
- VM Reboots
    During the boot time the network state is Connected
- IP provided from DHCP
- Host-name Updated

Note: No Customization Specification used here.

Test 2
======
behavior for deploying VMs using DHCP from CAS After installing cloud-init

Tasks Invoked by vCenter

- Clone Virtual Machine from Template
- Reconfigure Virtual Machine
- Customize Virtual Machine Guest OS
- Power on Virtual Machine
        During the boot time the network state is Connected
- Customization doesn't Start at all, so its not listed in the VM Events
- IP provided from DHCP
- Host-name is not Updated
- Cloud Config Code executes successfully

Note: No Customization Specification used here.

Test 3
======
behavior for deploying VMs using Static IP from CAS before installing cloud-init

Tasks Invoked by vCenter

- Clone Virtual Machine from Template
- Reconfigure Virtual Machine
- Customize Virtual Machine Guest OS
- Power on Virtual Machine
        During the boot time the network state is disconnected  
- Customization does start, listed in the VM Events and successful
- VM reboots and network shows as connected
- IP provided from Static IP Range
- Host-name is Updated

Note: No Customization Specification used here.

Test 4
======
behavior for deploying VMs using Static IP from CAS After installing cloud-init
following KB https://kb.vmware.com/s/article/59687

Tasks Invoked by vCenter

- Clone Virtual Machine from Template
- Reconfigure Virtual Machine
- Customize Virtual Machine Guest OS
- Power on Virtual Machine
        During the boot time the network state is disconnected
        
- Customization does start and successful, listed in the VM Events
- VM reboots and the network shows as connected
- IP provided from Static IP Range
- Host-name is Updated
- Cloud config executes fine


Note: No Customization Specification used here.

-- 
You received this bug notification because you are a member of Ubuntu
Bugs, which is subscribed to Ubuntu.
https://bugs.launchpad.net/bugs/1833623

Title:
  VMware Guest OS Customization Fail for Ubuntu 16.04  with Cloud-init
  19.1

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu/+source/cloud-init/+bug/1833623/+subscriptions

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