Escalate promises an end-to-end service that includes commerce site design, transaction processing, back-end fulfillment, and logistics. Escalate essentially acts as a services aggregator. Its customers' transactions will be processed on Sun Solaris and Windows NT servers at hosting company Global Crossing's data center, and fulfillment will be handled by logistics partners such as Rush Order and E-nited.

"Going forward, we truly believe that companies that design and build their own E-commerce infrastructures will be in the minority," says Lim, Escalate's president and CEO. Escalate has 100 employees and about $40 million in funding.

Escalate's pricing, which starts around $25,000 plus monthly charges, lets customers choose to pay those costs via a combination of transaction and subscription fees. "We have a lot of different E-commerce agreements with our partners, so we needed pricing that was very flexible," says Jay Thomas, VP of E-commerce at Escalate customer Quokka Sports Inc. in San Francisco, which sells gear and apparel for sports events such as the America's Cup. "And we wanted a variable rather than fixed cost structure, so we never thought about building it ourselves."

Barksdale says he put money in Escalate because "we like to invest in businesses that are aimed at markets that are broad and deep. Escalate has shown the ability to bring medium-sized businesses up real quick."

USinternetworking will host Ariba's ORMX application, which lets companies purchase nonproduction supplies and services on the Web. USinternetworking customers will pay an undetermined flat monthly fee to use ORMX as part of the vendor's Internet Managed Application Provider portfolio of hosted apps.