I've been thinking a fair bit about VSTS (aka Whitehouse) since yesterday. It's fairly obvious that MS wants to move into the complete development lifecycle market –
while VSTS does not include a requirements tracking tool it includes everything else (issue tracking, source control, load testing etc, etc) and is fully extensible.

The obvious target for this move is Rational (which has been a division of IBM for while). MS kept VSTS pretty quite before the US TechEd, but it was fairly clear
that they had to do something about SourceSafe, so the source control section of it was probably apparent to IBM/Rational before it happened.

It's interesting to look at some of the Eclipse sub-projects in this light. For instance, the expansion
of the Hyades sub-project covers a lot of the testing requirements. Rational has obviously built significantly on this for their toolset, but a significant
proportion is available for free.

It seems to me that Microsoft wants to compete with Rational features and will undercut them on price. I think the expanded Eclipse toolset will mean third
party vendors will quickly build tools come close to matching VSTS on features, but will be able to massivly undercut it pricewise.

This competition will be great for users, but I think a lot of high end tool vendors will struggle. I think in a years time companies like Mercury & Compuware will
need to either cut their prices and/or find new sources of revenue.