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We need to allow users to check-out check-in files in Windows Explorer.

Is it mandatory to install Visual Studio in order to use Team Explorer or TFS Power Tools?

What kind of licenses will be needed?

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yes there is a way you can install team explorer which doesn’t require any kind visual studio license.

Check this:

 Through this, you can install the tfs power tools to get windows explorer that allows source control operations. 

Note: if you are using azure-devops then you will get 5 users for free. On-premise tfs you still need to pay.

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