The SaaS business model is substantively different from the traditional, on-premise software business model; however, to date, most analysts have used the same metrics (typically billings and free cash flow) to assess the economics of both business models. While billings and free cash flow are metrics of import, they tend to obfuscate the merits of high-growth SaaS business models due to sizeable, upfront customer acquisition costs and muted upfront benefits resulting from SaaS vendors’ pay-as-you-go offerings. In an effort to more effectively gauge the economics of SaaS vendors, our report entitled, “SaaS Economics: Examining the Value of Customer Additions” examines the value of subscriber additions over the entire customer life by focusing on 3 key drivers: 1) customer acquisition costs, 2) pricing power and 3) the duration of the customer life.