The software industry is changing the way that companies buy and use software; a growing number of vendors are launching products using the software-as-a-service (SaaS) model. To help B2B customers feel comfortable moving from on-premises software to SaaS, software vendors must mitigate concerns about the out-of-pocket costs of SaaS by comparing total cost of ownership (TCO), messaging, and offering strategies. This report describes a six-step process for developing a TCO analysis of SaaS vs. on-premises software.