MSDN pricing: Case of bad expectation setting?

MSDN support for the various editions of Visual Studio 2005 gets steeper on the higher end. Mike Gunderloy sorts through the options.

Microsoft recently announced a new pricing structure for MSDN subscriptions, with the new prices coming into effect when Visual Studio 2005 ships later this year. Although we've known for some time that VS2005 would feature more stratification into different markets than previous versions, the new pricing still came as a shock to many long-time MSDN subscribers. Currently the high-end MSDN subscription is MSDN Universal, with a list price of $2,799. Under the new pricing, the high-end subscription becomes Visual Studio 2005 Team Suite with MSDN Premium Subscription, with a list price of $10,939 - an increase of over $8,000! What's going on here?

To answer that question, you need to understand a bit about the various editions of VS2005. At the bottom end Microsoft has added a series of Express Editions at $49 each, which introduce new programmers to Microsoft tools. These editions lack basic amenities such as source code control, and they're not suitable for professional use. Next up is the $299 Standard Edition, followed by the $799 Professional Edition. These are the versions the Microsoft anticipates most Visual Studio developers using. The difference between Standard and Professional is that Standard has a "streamlined" user experience and lacks high-end features like remote debugging, SQL Server 2005 integration, and SQL Server Reporting Services support (Professional bundles SQL Server 2005 Developer Edition).

If you're an independent developer who wants Visual Studio 2005 Professional Edition, plus the other MSDN content that you've grown to know and love (the operating systems, productivity tools, and servers for development use) then you can sign up for the Visual Studio 2005 Professional Edition with MSDN Premium subscription at $2,499. This is going to be the appropriate level for a lot of developers moving forward.

But now we come to the high-end of the Visual Studio story, and here's where quite a few independent developers are rather upset with Microsoft. Microsoft is adding four new products at the top end of the Visual Studio product line:

  • Visual Studio Team Edition for Software Architects. "Team Architect Edition includes integrated and productive tools for visually constructing service-oriented solutions that are designed from the onset for their deployment environments."
  • Visual Studio Team Edition for Software Developers "Visual Studio 2005 Team Developer Edition equips developers with advanced static analysis, code profiling, code coverage, and unit testing tools that enable teams to design for quality, early and often throughout the life cycle."
  • Visual Studio Team Edition for Software Testers "Visual Studio 2005 Team Test Edition builds on the developer offering to better equip testers with the tools they need to manage and run a wide assortment of tests, including unit tests, manual tests, web tests and advanced load testing tools that enable teams to verify the performance of applications prior to deployment."
  • Visual Studio Team Suite combines all of the above

MSDN with one of the Team Edition products will go for $5,469, and as I already mentioned, the whole Team Suite with MSDN is $10,939. In addition to those new products, there's also the Team Foundation Server, which provides the source code control server for the Team Edition products, and which is a separate $2,799 license. These new products are designed to push Visual Studio into the "enterprise" market currently occupied by development tools from vendors such as Clearcase and IBM/Rational. In this market, price tags of $5,000 per seat are not unusual. Indeed, price tags of $50,000 per seat are not unknown for some specialized tools.

If you're running a large development team at a Fortune 500 company, an expense of $5,000 per developer (or architect or tester) isn't outrageous. It's part of the cost of doing business, and it's not out of line with buying health insurance or paying for computers and cubicles. Indeed, if Microsoft priced Team System much lower they might have trouble being perceived as serious in this market. They're going to be facing serious problems convincing large development organizations to take a chance on a version 1 Microsoft product instead of an established enterprise development tools vendor as it is.

But I think Microsoft made some serious mistakes in communicating the new vision to their long-term core constituency of independent developers and consultants who subscribe to MSDN. If you've got an MSDN Universal subscription when the new products ship, you can choose one of the Team Edition products to get at your current pricing level - but only one. This plan was not widely broadcast in the initial rush of excitement generated by Microsoft showing off the new Team System features as they started handing out beta test copies for MSDN Universal subscribers.

This upgrade plan isn't sitting well with long-time MSDN subscribers, who feel they've been paying Microsoft thousands of dollars per year for many years with a tacit understanding that they would get copies of all of Microsoft's development tools in return. Although the top price of MSDN has crept up over the years, it's never taken such an astronomical leap in a single year. Although Microsoft never explicitly said "you'll get everything," the very name "Universal" and the marketing of the MSDN Universal subscription as offering access to the "complete set of the latest Microsoft developer tools" certainly raised a strong expectation in many developer's minds that this was the price they would pay to stay current in Microsoft tools and technologies, including everything that got added to Visual Studio.

MSDN has been a good deal for both independent developers and for Microsoft for many years. For one price, consultants could get familiar with a wide range of Microsoft technologies. We could walk into a customer and recommend using just about any Microsoft product, knowing that we could install it on our own network, test it out, and work with it to develop our expertise. Now, Microsoft is sending a new message to consultants who pay for MSDN out of pocket: "we don't need you to help us sell this particular product." That may be true, but it's not very smart messaging. Developers reward loyalty with loyalty - and vice versa.

Every developer needs tools that support unit testing, code analysis, continuous integration, and distributed source code control - not just developers working in "enterprise" settings. The question is, will the developers who currently use open-source, free, and third-party tools such as NUnit, FxCop, CruiseControl.NET, and Subversion lashed together with Visual Studio 2003 be content to continue on that path moving forward, even though they were hoping to use the integrated solution that Microsoft has been promoting in the form of Visual Studio Team System? Or will they now take a fresh look at other vendors and other development environments?

What do you think? Feel free to let the editors of SearchVB.com know.

Mike Gunderloy is an independent developer and author working in eastern Washington state. His recent books include Painless Project Management with FogBugz (Apress) and Coder to Developer (Sybex). You can read more of Mike's work at his Larkware Web site, or contact him at MikeG1@larkfarm.com.

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