More pricing and licensing changes coming

Earlier this year, we started a process of reviewing our pricing and licensing for Team Foundation Server and Visual Studio Online.  Our intent was to review all of the customer feedback we’ve received to look for changes that would simplify purchasing and make it more affordable for teams to include everyone in the broader organization who needs to interact with the development team.

I previewed the first set of changes in July which included a new Stakeholder license that enables people outside the “development team” to track progress, make suggestions, file bugs, etc.  This means that VS Online work item functionality is completely free for all users.  We also included expanded access to the test hub in VS Online by adding it to the Advanced license.  We put those changes into effect at the end of August.

Since then we’ve continued to review our pricing and licensing and I’m now ready to preview the next set of changes which will go live on VS Online over the next month or so and be available for Team Foundation Server by the release of TFS 2015.

Let’s look at the changes:

Release Management

Our current Release Management pricing and licensing has two components:

    • Users who are going to manage release pipelines and releases require a license available via VS Test Professional, VS Premium, VS Ultimate or MSDN Platforms.
    • Customers must also license any machine receiving a deployment from Release Management, based on the number of processors and VMs running on each machine receiving a deployment.

The biggest feedback we’ve gotten is that, in the modern DevOps, cloud first world, counting processors and VMs simply isn’t viable.  Software and infrastructure is too fluid.  Development teams are constantly provisioning, deprovisioning, scaling up and down, etc.  Trying to keep count of how many processors you are deploying to in a Dev/Test environment for any purpose, much less license compliance is, well, challenging at best.

So, we are changing it.  As of January 1st, 2015, you will no longer have to pay any per-processor (or any other per deployment environment) charge for Release Management.  The user license terms for authoring release pipelines that I described above will still be in effect.  We believe this will make Release Management more affordable and, even more importantly, MUCH easier to manage.

We are still working on details on the pricing for our release management service on VS Online which is still in preview.  We will be announcing the cloud-based release management licensing sometime early next year and I expect it will be simple to understand and manage – no per deployment environment licensing.

Test Execution

In August, as I mentioned above, we added access to the VS Online test hub into the VS Online Advanced license to provide an affordable monthly subscription based way to access the VS Online test case management functionality.

We continue to get feedback that there are two categories of test usage – people who manage the testing by creating test plans, assigning test runs, etc. and people who run tests, especially user acceptance tests.  Customers keep asking for affordable ways to manage these different types of users.

In response, we’re making two licensing changes that I believe will help with this greatly:

    • VS Online – In January we will be adding the test execution capabilities in the test hub into all “Basic” levels of VS Online = VS Online Basic, VS Online Professional, and VS Professional with MSDN subscribers.  So, people who need to run tests can use a Basic license (including one of the 5 free ones), people who need to manage tests in the test hub can use an Advanced license and people who need the full Microsoft Test Manager set of capabilities can purchase VS Test Professional, VS Premium or VS Ultimate.
    • Team Foundation Server – With TFS 2015, we will be adding test execution rights, using the test hub, into the TFS Client Access License (CAL).  Users who need to just run tests only need a CAL.  Users who need more will need to purchase VS Test Professional, VS Premium or VS Ultimate.

We think these changes will make it easier to bring anyone in the organization who needs to run tests, like acceptance tests, into the development process.

Cloud Load Testing

It didn’t take long after we released our cloud load test pricing for me to realize that we had gotten it wrong.  We originally priced it by looking at competitive cloud based load testing tools but failed to take into account the cloud trends and the fact that customers would, first and foremost, compare our cloud service to the cost of hosting our on-prem load testing solution in Azure VMs.

The magnitude of the problem really hit me when we had a customer come to us wanting to run about 81 million virtual user minutes of load testing every month (to put that in perspective, that’s about 27 hours of load tests of 50,000 virtual users – big, but not ridiculous for a high scale site).  When you do the math on our previous pricing you quickly realize that at $0.002 per vUser minute, that’s $162,000 per month!  That sound you just heard was me falling out of my seat.

So, first and foremost, we realized that we had a pricing model that didn’t scale effectively for large customers.  We sat down with this customer and several others to talk through what would be reasonable.  The more we looked at it, the more we realized that for very large load testing scenarios, the price needed to approach that of just the compute cost to do the work and a significant per minute premium over that, simply wasn’t viable.

So, we decided we needed a tiered model that would give good price breaks as load test usage got higher.

Our new pricing model for VS Online Cloud Load Testing is as follows:

    • 20,000 Virtual User Minutes (VUM) for FREE every month
    • $.0004/VUM for 20,001-2M VUM
    • $.0002/VUM for 2,000,001-10M VUM
    • $.0001/VUM for usage beyond 10M VUM/month

So, in the scenario above, the customer would pay 20,000 * $0.00 + 1,980,000 * $0.0004 + 8,000,000 * $0.0002 + 71,000,000 * $0.0001 = $9,492 per month.  That’s $162,000/$9,492 = 17 times smaller.  Please take this math as demonstrative rather than definitive. For instance, it does not include Azure volume discounts you may receive, but it should give you a pretty good idea of how much more affordable Cloud Load Testing will be.

These pricing changes will be available to Azure direct customers later this week and will be effective for Enterprise Agreements starting January 1st.

Another change you may note here is that we increased the number of free monthly virtual user minutes from 15,000 to 20,000.  This change will go into effect in the next couple of weeks.  The net result of all of this is a lower price at every single usage level and a dramatically lower price the more you use.  We hope this will make load testing substantially more approachable to all organizations.  Load testing is an incredibly important part of building any [JB1] significant app and Cloud Load Testing makes getting started super easy.

VS Online Build Service

We’ve gotten feedback on our build service pricing that it has a similar “scaling” problem as our load test pricing, though not nearly as big.  To make the build service more affordable for teams running many builds, we are introducing a tiered pricing model there as well.

The VS Online build service pricing will be:

    • 60 minutes/month FREE
    • $.05/minute for the next 19 hours
    • $.01/minute for usage above 20 hours/month

This addition of a price break over 20 hours per month can reduce the price by almost 5 times for teams running a lot of builds.

These pricing changes will be available to Azure direct customers later this week and will be effective for Enterprise Agreements starting January 1st.

VS Online Load Test and Build Service caps

Another piece of feedback we’ve gotten for both Cloud Load Test and the Build Service is that people are concerned about the possibility of run-away spending.  What happens if something goes wrong and I accidentally consume $100,000 in a month?  To help address this, in December, we are introducing the ability to apply spending caps for load testing and build.  This will, hopefully, give you some piece of mind that it can’t run away from you.

Visual Studio Online Professional

One of the offerings for Visual Studio Online is Visual Studio Online Professional which combines a VS Online basic license with a monthly license to Visual Studio Professional.  Since its inception, we’ve had a 10 user limit on this product because it’s really designed for small teams (whereas MSDN subscriptions are the solution for larger teams).  However, after we got enough people asking for the 11th user, we realized that the complexity just wasn’t worth it and that 10 seemed pretty arbitrary.  As a result, we are eliminating the 10 user limit – though, it’s still true that VS Professional + MSDN is the right offering for most larger teams because it not only includes the Visual Studio Professional IDE and access to Visual Studio Online, but also includes dev/test rights to Windows, Windows Server, and SQL Server and a $50/month credit on Azure, technical support, and many other benefits.  This change will go into effect within the next couple weeks.

I’m very happy to be able to announce this next round of pricing and licensing changes to address the feedback we’ve gotten and to make TFS and VS Online available to more people within organizations.  Enabling everyone to participate is a key component of an agile and modern software development team.

We are not done looking at pricing and licensing, of course.  We are continuing to look at feedback and look for opportunities to remove friction and simplify.  We always want to hear what you think and will do our best to make you happy.

Look forward to updates as these changes actually go into effect.

Thank you,

Brian