• Chart: Team System Pricing Details
• Illustration: Team Foundation and CALs

Newly revealed pricing details for Visual Studio (VS) 2005 and Visual Studio 2005 Team System (VSTS) show that Microsoft is aiming to undercut high-end competitors, such as IBM/Rational, by introducing new editions for team development and making changes to its Microsoft Developer Network (MSDN) subscription license program for developers. However, the prices may make VSTS too expensive for small teams of developers.

Four Editions

Previous versions of VS included a series of Standard Editions (one for each of Microsoft's programming languages), a Professional Edition that included all the languages, and a pair of Enterprise Editions—one for developers and one for architects.

With VS 2005, Microsoft is making significant changes to the VS lineup, adding a set of new high-end editions for team development as well as lower-cost editions for new developers. The lineup will consist of the following:

Express Editions are a series of products designed for beginning programmers and students—one for each of Microsoft's programming languages (VB, C#, C++, and J#) and one for Web development—priced at US$49 each.

Standard Edition now combines all of Microsoft's languages into a single product, unlike VS 2003, which offered a separate Standard Edition for each language. VS 2005 Standard Edition enables developers to build Web applications and services and client applications and is priced at US$299, with version and competitive upgrades available for US$199.

Professional Edition adds support for database development and contains many of the features previously available only in the Enterprise Developer product. It is priced at US$799, with version and competitive upgrades available for US$549.

VSTS is a new suite of products based on a set of roles commonly found in development teams. It consists of Team Foundation Server and three client editions: Team Edition for Software Architects, Team Edition for Software Developers and Team Edition for Software Testers. These components are available individually or in a bundle that provides the features of all three editions in a single development environment. (For details on the specific features provided by each of the role-based SKUs, see the chart "Team System Components by Edition" on page 20 of the Feb. 2005 Update.) In addition, Team Foundation Server requires that named users have Client Access Licenses (CALs) in order to access features such as bug tracking and source code control, and although the price of the Team Editions includes a CAL, users such as project managers, who access the Foundation Server exclusively through tools like Excel, will need to purchase CALs separately. (For an illustration of the licensing requirements, see "Team Foundation and CALs".)

Software Assurance Comes to Tools

In addition to changes in the product lineup, Microsoft is bringing Software Assurance (SA), its software maintenance program, to developer tools. As part of a revamp of its popular MSDN Subscription program, Microsoft is making MSDN the SA component for Visual Studio. MSDN is currently available in five editions, ranging from MSDN Library, which provides access to technical documentation only, through MSDN Universal, which includes development versions of nearly all of Microsoft's enterprise products. Development versions are functionally identical to retail products but are licensed for use only in the course of creating an application and may not be used in a production environment. The new lineup consists of four editions, two of which can be purchased separately from Visual Studio:

MSDN Library provides the same set of technical content as the current version and carries an estimated retail price of US$199 with annual renewals costing US$99.

MSDN Operating Systems adds development licenses for all of Microsoft's major OS products, including Windows 2000 Professional, Server, and Advanced Server, as well as Windows XP Home, Professional, Tablet, and Media Center Editions. The estimated retail price for new subscriptions is US$699 and US$499 for annual renewals.

Two editions can only be purchased as the SA component of VS 2005:

MSDN Professional has the same content as the MSDN OS subscription and adds a development license for SQL Server and SQL Reporting Services.

MSDN Premium, a new edition, contains the same contents as the previous MSDN Universal, including development versions of products such as Exchange Server, BizTalk Server, and Office.

Customers purchasing new licenses for any of the VSTS editions have the option of buying SA at a cost of an additional 29% per year on a two-year agreement. Customers opting for SA will receive an MSDN Premium Edition subscription and will have rights to any upgrade that Microsoft makes available during the term of the agreement. At the end of the two-year agreement, customers will have to renew SA to continue getting MSDN Premium. (Three-year agreements, while common for other Microsoft products, will not be available for VS.) For a complete list of license and SA prices for Team System, see "Team System Pricing Details".

Customers purchasing the Professional Edition of VS have three choices: a stand-alone license with no MSDN benefits, a license with a one-year MSDN Professional subscription, or a license with a one-year MSDN Premium subscription (both subscriptions can be renewed annually). These customers, however, end up paying much more than the 29% premium paid by VSTS customers. The retail price for a stand-alone copy of VS Professional is US$799; VS Professional with one year of MSDN Premium costs US$2,499 with annual renewal costs of US$1,999.

In addition, MSDN Enterprise and Universal subscriptions will no longer be available on a stand-alone basis after the release of VS 2005 and VSTS. As a way of rewarding long-time MSDN subscribers and encouraging VS customers who haven't yet subscribed to do so, all MSDN Enterprise and Universal subscribers as of the release date of VS 2005 and VSTS will receive a copy of one of the VS Team Editions and an MSDN Premium subscription. However, customers looking to use any of the team development features, such as the bug tracking database or the new source-code control system, must license the Team Foundation Server separately.

Winners and Losers

Whenever Microsoft makes sweeping changes to its licensing and pricing structures, some customers will come out ahead while others will not.

In the case of VS 2005 and VSTS, organizations that already have MSDN Universal subscriptions for each of their developers are clearly the biggest winners. Each of their developers will receive a copy of one of the Team Edition role-based SKUs, and the organizations will need to purchase only one copy of the Team Foundation Server. In fact, the least expensive way to license the Team Editions is to subscribe now to MSDN Universal, at an estimated retail price of US$2,799.

However, many large organizations "share" MSDN subscriptions among multiple developers. Although such sharing violates the MSDN licensing terms, Microsoft has tacitly accepted such violations on the theory that developers using VS are building Windows applications, and that the company will make up the lost revenue through additional sales of OSs and server products. But with the new higher-end editions of VS, along with the corresponding higher prices, the company may no longer be willing to turn a blind eye to such sharing, and customers looking to get legal face a steep bill.

Smaller development shops have a difficult choice. Large organizations can amortize the relatively high cost of the Team Foundation Server over many developers, but for a team of five developers, even the discounted Open License price of US$2,230 for the server component may be prohibitive. This is particularly true if the customer is only interested in the bug tracking and source-code control systems, for which less expensive alternatives are available. Microsoft's source-code control solution for these customers is Visual SourceSafe—a product that lacks many competitive features and which the company has clearly put into maintenance mode. By leaving this hole in its product line, Microsoft has left room for competitors who cater to small teams of developers.

Resources

For more information on the new source-code control features of VS, see "VS 2005 Checks in New Source Control" on page 24 of the Feb. 2005 Update.

The Express Editions of VS 2005 are described in "Express Tools for Beginners, Hobbyists" on page 17 of the Aug. 2004 Update.

The VS 2005 home page is msdn.microsoft.com/vs2005.

The VSTS home page is llab.msdn.microsoft.com/teamsystem/default.aspx.