In the past 24 months, something extraordinary has happened. The value of publicly traded SaaS companies has grown by 200 to 400% while the underlying customer unit economics of those businesses hasn’t changed. Below is a chart of the ratio between enterprise value to revenue for two segments of SaaS companies. The All Segment contains 36 publicly traded SaaS companies. The High Fliers comprises the upper half. From about 2004 to 2011, the average publicly traded SaaS company held an EV/Rev multiple of 3 to 5x.