A recent report from market research firm In-Stat puts Covad (News - Alert) Communications at the top of the hosted VoIP heap.

The report, authored by In-Stat (News - Alert) Senior Analyst David Lemelin, shows that Covad not only has the broadest and most comprehensive set of business VoIP solutions, it is also playing a highly proactive role in accelerating VoIP adoption, particularly among small to medium sized businesses (SMBs), by “reaching out” and actually helping companies make good decisions about which type of VoIP service they should choose. This has led to stellar growth for the company during the past year and further established it as a leading national provider of integrated voice and data communications solutions.

“Covad has remained the hosted VoIP market leader by providing businesses with the right value proposition,” Lemelin said in a press release issued by Covad today. “Covad has adapted well to the changing dynamics of the business marketplace. The introduction of their Clear Edge Office product is designed to meet the needs of smaller businesses where we expect to see increasing adoption of hosted solutions. This gives Covad a complete portfolio of hosted VoIP services, designed to meet the needs of businesses of all sizes.”

Covad’s Clear Edge suite of products includes “Covad ClearEdge Pro,” a fully hosted VoIP solution designed for businesses of up to 250 employees; “Covad ClearEdge Office,” a hosted solution built for businesses with under 20 employees; and “Covad ClearEdge Integrated Access,” which combines separate voice and data access services into a single solution over a dedicated, secure voice optimized broadband line.

This is the fourth year in a row that In-Stat has named Covad the overall market leader in the VoIP industry - this despite rapidly increasing competition from existing voice providers and new entrants targeting the SMB segment. In the report entitled “Hosted VoIP: Steady Growth, But Will the Boom Come?” Lemelin credits Covad “for its effective use of existing broadband distribution channels to market its solutions.” He also sites Covad’s Voice Optimized Access, which allows voice traffic to be prioritized over data, as a competitive differentiator.

The report – which provides an overview of the growth of hosted VoIP market during the past year - predicts that the market for hosted VoIP services will exceed $2 billion by 2010, an 80 percent compound annual growth rate over 2005.

The hosted VoIP market grew by leaps and bounds this past year, as many businesses, both large and small, came to realize that VoIP not only reduces communications costs, but also opens the door to a vast realm of new calling features and integrated voice/data  systems which can radically improve employee productivity. Interestingly, this growth came “despite little change in mobility and convergence dynamics in the market” during the past year.

“The small business market continues to be the sweet spot for this capability as US businesses begin to better understand the benefit of business-grade VoIP solutions as an alternative to broadband IP telephony,” an abstract of the report on In-Stat’s Web site states.

Lemelin asserts that VoIP “is now in an accelerated adoption stage, as businesses are beginning to better understand the multiple IP voice alternatives available to them and accordingly seek out business-class solutions.” Covad is one of the few companies offering a range of hosted VoIP solutions which can be tailored to best fit a company’s needs.

“In-Stat’s ranking confirms our commitment to providing small and medium-sized businesses with larger enterprise class features combined with the simplicity and low total cost of ownership they demand,” said Eric Weiss, Covad’s chief marketing officer, in the release. “By choosing a hosted voice solution from Covad, our customers eliminate the costly, time-consuming and complex management of their phone systems and can instead focus on what really matters – their business and customers. The business grade service and support has enabled Covad to provide these benefits to a variety of vertical industries, including areas such as real estate and retail, which In-Stat highlights as major hosted VoIP opportunities.”

In addition to offering market forecasts, the report discusses factors driving the adoption of hosted solutions, including mobility convergence and the integration of features and business processes, as well as the other VoIP solutions hosted VoIP competes with. Differences in service provider perspectives, sales channel strategies and approach to the market are also reviewed.

For more information, visit www.in-stat.com.

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Patrick Barnard is Assignment Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.