Now Edlebeck wants more from his site. It serves as a good advertising vehicle for his business, but IBM's Home Page Creator isn't sophisticated enough to let him create a reservation system that links to his business partners, the bed-and-breakfast inns. People can request rooms at the site, but Edlebeck still has to send requests to the inns offline. "I wish we could have more back-end tools so that we could post availability," he says.

Edlebeck will have his wish by April, according to Gordon Ritter, VP of IBM Global Small Business Services. IBM will also add tools to its online center for building customer-relationship management features into sites, he says.

IBM is among a number of vendors that are rushing to broaden services, capabilities, and applications offered at Web sites created for small to midsize businesses. In addition, vendors are partnering and combining their services, in an effort to create one-stop shops for small businesses seeking everything from back-end Web-site hosting services to front-end application services that can be accessed through a small-and-midsize-business site. "One vendor will be able to develop, customize, and offer all the applications a small to midsize business owner will need," says Eric Klein, a senior analyst at the Yankee Group.

There has also been a recent emergence of dot-com startups marketing online services for small and midsize businesses, often with the promise of low subscription prices and free basic services. Some of these companies have tried to promote themselves by developing partnerships with larger vendors to join their sites. Such deals were recently made for Concentric Network Corp.'s new Metral portal and Hewlett-Packard's Brio.

There appears to be good demand for such services. The Yankee Group predicts the annual market for Web application services for businesses with up to 500 employees will hit $2.9 billion by 2003. "These companies cannot afford to lose thousands of dollars in downtime and productivity that implementing and updating software causes," Klein says.

Many vendors in this area continue to be referred to as application service providers. But some small and midsize businesses, which typically lack IT resources, are also seeking the services of Internet service providers, which set up and operate Web sites to help businesses avoid investments in infrastructure and network management.

The distinctions between these types of service providers are dissolving, analysts say. For one, more vendors are expanding into new areas of online services or teaming to offer a variety of services through a portal. "This market is going to continue expanding in terms of the breadth of its offerings," says Bill Martorelli, an analyst at Hurwitz Group. "Companies that once considered themselves ISPs are now labeling themselves ASPs." Yankee Group's Klein says "hosted business solutions" is starting to emerge as a new catch phrase, to encompass all Web-related services.

Consider the emergence of affiliate marketing services, which don't neatly fall under the classification of ISP or ASP.

Robin Walsh, an affiliate specialist for NextCard Inc., an Internet credit-card company in San Francisco, uses the ClickTrade affiliate marketing service at bCentral, Microsoft's portal for small and midsize businesses. Through this service, NextCard can advertise on any number of affiliate company Web sites. Its affiliates receive a commission based on the number of customers they refer to NextCard via their sites. "We've tried out-of-the-box software solutions that are similar, but this one is much more convenient," Walsh says. "We don't have to worry about upgrades, and I can access the service from anywhere."

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Photo of Walsh by Richard Morgenstein