It has nothing to do with billing. I was just pointing out that the second 'S' in 'SaaS' means "service" and once you get into services your margins often go down, that's why I (and other folks I know who've done SaaS at scale) disagree with Patrick on "economics of SaaS are impossibly attractive". I am willing to bet that Splunk's margins are way better than Loggly's.

Moreover, if you're smart & lucky and you manage to find a large niche with good margins running SaaS on AWS, Amazon will launch it as a service. Mr. Bezos is around & watching you :)

[EDIT] Besos -> Bezos :)