In the 2008 era, the adoption of TFS was blocked because of the costs that small teams had to make to buy Team Foundation Server.

You had two options:

1) the Workgroup Edition

2) the Full Edition

The work group edition was included in a MSDN subscription and supported up to 5 users. So for small sized teams it was very cheap to work with TFS. However when the company grows to 6+ people, you had to buy the Full Edition.

The Full Edition costs $2700, and for every user that makes use of TFS you need a CAL, which is $500. In a MSDN subscription a CAL is included.

So if you have a shop of 5 developers with a MSDN subscription, and 7 people that do not have a subscription, you have to spend

TFS 2010

In the TFS 2010 era, there are new version of TFS. You have one licensing model with different installation options:

1) The Basic edition

2) The Full edition

The basic edition consists of the same functionality as the Full Edition, except it does not contain the reporting and the sharepoint integration. Therefor the Basic installation is suitable for a client machine. It will cost you $500 to purchase TFS.

When you want to make use of the Full Edition, you can now buy it for $500, and it includes 5 CAL’s. For every other user, you need to buy an addition CAL of $500 or you need to have a MSDN subscription.

So lets go back to our example shop of 5 developers and 7 other persons. You will now see that the license costs will be far less: