(FORTUNE Small Business) – At 3 a.m., off the coast of Jamaica, Gary Root caught a glimpse of movement on the deck of the stranded container ship he was trying to salvage. Looking harder, he saw several men armed with large machetes climbing over the rail onto the vessel. Root woke the ship's captain, who grabbed his gun and ran into the darkness. Suddenly shots rang out. Then Root heard shouts and the sound of running. Shortly thereafter, the captain returned belowdecks. "That should take care of it," he said.

That incident was in 1991, and it is just one of the adventures that Root can recount after two decades of working at sea, since he enrolled in the Coast Guard Academy at 17. After earning a master's in engineering from the University of Michigan, he spent six years as the senior naval architect and salvage superintendent at Crowley Marine Services, based in Oakland. Root traveled the world for Crowley, rescuing ships and their cargos.

In 1996, Root left Crowley to launch Technical Salvage Advisors, a San Francisco firm that handles the aftermath of explosions, collisions, groundings, and other marine mishaps. TSA has grown steadily, with Crowley now its biggest client. Last year Root and Crowley joined forces to land a five-year, multimillion-dollar salvage contract with the U.S. Navy.

Root, 37, keeps his passport handy at the office and his car trunk stocked with an insulated survival suit to protect him in case of an accidental plunge into frigid ocean water. To shelter himself against a downturn in his original business, he has launched another four eclectic ventures that entail less physical risk and keep him closer to his wife and two children. Dragnet Solutions develops software that helps financial institutions detect fraud. Mayday! Mayday! sells software that turns personal computers into monitoring stations for fire and carbon-monoxide alarms. Liquid Spark develops consumer electronic gadgets, including an athletic-performance monitor that uses GPS technology to tell runners how fast they're moving. And eBabka.com sells Polish coffee cakes online.

Root is cagey about his revenues, saying only that his combined operations bring in between $1 million and $10 million a year. He notes that three of his five companies are profitable: The exceptions are Mayday and the recently launched Dragnet. "Over the years I've found that when one company is doing well, another one is suffering because of market conditions," says Root. "If I had all my eggs in one basket, I'd be in trouble."

In 1999, as Root's business interests diversified, he started looking for software that could manage the data needed to run his five companies. He wanted an application that could handle accounting, marketing, communications, and e-commerce. And he didn't want to spend a lot of money upfront. Root first tried SalesForce.com, a customer-relations management application, and Best Software's PeachTree, an accounting program for small businesses. He found both too specialized for his needs. Intuit's popular QuickBooks program offered accounting support but little else, while the existing versions of Great Plains (later acquired by Microsoft) and SAP's BusinessOne, he thought, were too complex, cumbersome, and expensive.

Root then turned to NetSuite, a Web-hosted application that integrates accounting, online sales and marketing, and customer communication. The service offers real-time updates and can be customized for each of Root's businesses. One particularly nifty feature allows him to jump among sets of data on his different companies with a single keystroke.

Root first used NetSuite's Small Business Suite to run eBabka's targeted e-mail marketing campaigns and track resulting sales. After eBabka's revenues took off, Root switched to NetSuite's top-tier product, NetSuite (formerly NetSuite Professional), and started using it to run all five of his companies.

As the CEO of a mini-conglomerate that sells everything from salvage services to baked goods, Root needed exceptional flexibility in his business software, and he says NetSuite has provided it. At Technical Salvage he uses the software to post project updates in real time so that clients won't harangue him around the clock during operations. Mayday! Mayday! uses NetSuite mainly for customer support and to track internal software development. Dragnet and Liquid Spark use it to help prospective investors evaluate the company's track record.

At Dragnet, Root used NetSuite to build a Venture Capitalist Portal where investors can review a due-diligence package on the company, including an executive summary, the complete business plan, industry research, management bios, and financial statements. On the software development and sales fronts, Dragnet also uses NetSuite for bug tracking, lead generation, communications with distributors, and more.

Liquid Spark's NetSuite platform is similar to Dragnet's, except that the company uses the software to track complex licensing negotiations with large consumer electronics companies. One such negotiation has been dragging on for eight years. "A comprehensive relationship profile comes in very handy," Root says.

NetSuite Small Business costs $49 a month for each user and can handle as many as 100 users. NetSuite costs $99 a month per user and hosts as many as 500. Both packages allow unlimited transactions. The top-tier version includes 30,000 e-mail messages a month and 100 megabytes of file storage.

NetSuite is a strictly web-hosted application, meaning that the company administers the software over the web and stores all customer data on its own servers, which it says are secure. Several rivals offer both hosted and nonhosted options, but independent experts say NetSuite is the only solely web-hosted, full-service business platform for smaller companies. "Some companies provide pieces of the service offered by NetSuite, but not the whole kit and caboodle," says Sheryl Kingstone of the Yankee Group, a Boston-based technology consulting firm. "Others provide the full suite, but in a nonhosted environment," so the customer has to buy hardware and run the entire system himself.

NetSuite's larger clients employ hundreds of workers and conduct as many as 10,000 web-based transactions a month. Still, some competitors argue that NetSuite works best for smaller companies that need an integrated web presence but have limited budgets and no IT infrastructure. Growing companies with complex needs can save money in the long run, they claim, by going with a self-hosted application. "Hosted environments still bring additional consulting, customization, and training costs beyond the monthly fees," says Korey Lind, president of Third Wave Business Systems in Elmwood Park, N.J., which sells and supports both BusinessOne and Great Plains.

And of course, many business owners prefer to control their own data storage. If you're one of them, hosted solutions such as NetSuite probably aren't for you, says independent software expert Jim Shepherd, senior vice president of AMR Research in Boston.

Root has a few complaints about NetSuite, including sluggishness during upgrades and occasional inadequate customer support. But overall he feels that the software has been a great boon to his business. "We needed an automated platform that could handle a seamless flow of orders, from consumer clicking to production to UPS processing to follow-up to consumer response," Root says. "NetSuite was head and shoulders above all the other company management platforms on the market."

Root has paid a total of $12,000 in fees since he started using NetSuite four years ago. He estimates that the software has saved him $250,000 in IT and personnel costs. And while he may outgrow NetSuite in time, the software is currently helping him run a small but highly diversified conglomerate.

Perhaps most important, NetSuite allows this frenetic serial entrepreneur to relax occasionally. After he started using NetSuite to post salvage project updates, he says, "the phones stopped ringing. I could sleep once in a while instead of working the phones."