A strong mergers and acquisitions market is leading 95 per cent of recently-surveyed software CEOs to expect they will be acquired within the next four years.

The number contained in this year's PricewaterhouseCoopers' (PwC) annual report on Emerging Canadian Software Companies mirrors last year's findings, when an equal number of surveyed CEOs believed they would be acquired.

"Current activity levels and deal pipelines suggest that deals are still very much on the boardroom agenda of technology companies," said PwC partner Peter Matutat in a statement.

He added the challenge for emerging companies is to ensure they are well-positioned financially and strategically before putting the business on the market.

This year's report also found that software CEOs believe their biggest challenge is growing revenues with quality customers.

However, almost half of respondents predicted their revenues would grow by at least 50 per cent this year, with one-quarter expecting to at least double sales in 2008. Historically, however, surveyed companies overestimated their growth prospects.

Other survey findings include a significant decline in the satisfaction and the use of channel partners. In 2005, roughly 70 per cent of surveyed companies used sales channels, compared to only 50 per cent last year.