Software-as-a-service firms are finding funds without turning to public markets, reports the Wall Street Journal. They're also growing by means of mergers and acquisitions.

"Most software-as-a-service companies are still growing more quickly than traditional makers of business software, whose products must be installed on a customer's server systems. Rather than reacting to a mature market, makers of Web-based services are acquiring companies with complementary technology so that they can sell more services to their customers, said Simon Heap, a partner in Bain & Co.'s technology practice."

Recently in CIOI: "CIOs can be sure more consolidation is on the way in their vendor communities. And in the near term, chances are the buyers will be some very familiar names."