However, many analysts, such as Forrester's Schaaf, say Web hosts that own their own connectivity are in the best position to serve customers. What does this mean for IBM, which recently sold its network connectivity operations to AT&T, in terms of IBM's ability to help its hosting customers? Some analysts say it won't matter, since IBM has a tight agreement with AT&T to use the connectivity it just sold. But Dataquest's Hale says AT&T will become the No. 1 hosting company, thanks to its purchase from IBM.

IBM and AT&T have the size for global hosting support. Other companies also able to support global E-business include Sprint and UUnet. IBM, of all the competitors, has a well-developed systems integration business that can be useful to companies that need to tie Web operations into their back-office computers, analysts say.

Some of the vendors are developing specialities. UUnet, for example, focuses on "pipes, power, and ping," says Rick Mealy, the company's director of hosting services. Pipes are bandwidth to the Internet, power is the electricity needed to run the platform, and ping is monitoring of the network.

Verio focuses on creating branded packaged solutions for companies that don't have the resources to struggle through customized development of a Web-commerce operation. It's impressive that it is in the top five without serving many large companies.

As a telecom provider, GTE Internetworking offers customers the advantage of excellent bandwidth. But, like many phone companies, it's still working on developing customer-service and data-management skills, analysts say.

The blistering growth of the industry combined with complex network issues and unproven technology make life tough for Web-hosting companies. According to a report from Forrester Research, 50% of all customers of Web-hosting companies are dissatisfied with their service.

Talpx Inc., in Chicago, is an example of the type of Internet-age company that's pushing the capabilities and service capacities of Web-hosting operations. Talpx is an Internet exchange for the lumber and panel supply industry. Through Talpx, saw mills can sell their products to lumber yards and other distributors. It started business on the Web in April.

Richard Haddad, director of marketing, says the company chose UUnet for its hosting services because of the provider's ability to support its technical needs. In particular, Talpx developed a custom application that manages its business from end to end, including sales, financing, and payment processing. The application must make connections with a wide range of buyers, sellers, distributors, and facilitators of lumber purchases.

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