Evan Goldberg, president and chief executive of NetLedger, a provider of Web-based accounting and business management applications, believes that when the dust from the ASP storm clears those left standing will be companies who have rooted themselves in integrated services.

"At some point there will have to be consolidation. What will win out is more integrated single provider services versus the portals that aggregate the sources," said Goldberg. "I think the richest systems will be the integrated systems."

With this theory in mind, NetLedger, which went live about a year ago, is strategically teaming up with notable players in the small business marketplace, the most recent being Yahoo. Under the agreement, NetLedger's Web-based accounting services integrate with Yahoo Store, a commerce service which enables businesses to create, publish, and manage online stores, allowing online orders to be automatically transferred to the merchant's NetLedger account.

"We believe the Yahoo deal will give us access to thousands of committed customers," he said.

But, according to Goldberg, integrated systems are just one piece of the puzzle. Overcoming the lack of profitablity, which plagues so many Internet companies, and educating small businesses on the benefits of running a business online are also key.

"Profitability is always a challenge," said Goldberg, who admits that NetLedger, whose service starts at $4.95 a month per user, has yet to make a profit. "It would be bad if we were profitable because that would mean we are not investing enough. We are trying to spend time and money on educating small businesses on doing business this way."

How do ASPs overcome this challenge?

"That comes down to educating enough people about this approach -- getting the customer to really understand the benefits to purchasing the services," said Goldberg. Companies must "be seen, be heard and associated with important players in the industry," he added.

In an effort to educate small businesses on online services, NetLedger is turning to the accounting community and plans on launching its Certified Consultant Program by the end of the month, said Goldberg.

"We need an outsourced sales force of people that can help educate small businesses," he added. "An accountant can improve their own service. It can make you a more effective business consultant."

Under the program, accountants can have unlimited access to an account for training purposes; they can access a client's account for free if they are the single user; and accountants can be listed on NetLedger's site.

"Lack of access to the market can kill you," said Goldberg. "But ultimate access to the market won't make you."

-- By Antoinette Alexander

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