In DHCP-less or external-DHCP environments, image-based provisioning cannot be seeded for virtualized environments.

We need to have opt-in option to use DNS name instead IP address for SSH checks, that will solve the issue. This must be opt-in to prevent mis-provisioning. Also users need to be aware that password or ssh key must be correct in order to connect, it's recommended to change the default password on the image after system is provisioned to something different for production systems.