The latest news about licensing of Visual Studio Online and Team Foundation Server is truly exciting.

The first great news is that VSO licenses will be much cheaper, decreasing from $20/user/month (for the basic tier) to $8-$2, depending on the number of licenses. And you still have five users for free, free stakeholder licenses and MSDN subscribers are still covered by the subscription.

But the main thing is that VSO license will also grant client access license (CAL) for TFS. The dual licensing of VSO and TFS is currently a bit annoying, especially if you want to combine VSO and TFS, such as if you’re using VSO but you need a local TFS build server (which is, incidentally, the topic of my next blog post). Notice that you can use this license model even if you’re using on-premise TFS only – instead of buying individual CALs for $499, you can start paying only for the time when you need them and change the number of license exactly as you need. And it will be much cheaper.

If you consider using TFS but you have problems with the cost of licenses, I think this solves the problem. You don’t have to invest into CALs up front; you just have to find a few bucks every month.

The only bad news is that this doesn’t happen immediately. Some changes will take effect on 1 September, some a bit later.

If interested, you can find more details in Included CALs and Tiered Pricing on Brian Harry’s blog.