VoIP services for consumers has been a tough market because of the broad scope of services required, the burdensome regulatory requirements, and the fickleness of consumer preferences. Just ask Vonage whose prospects are looking worse even as both AT&T and Verizon cancel their IP-equivalent services.

Note that Comcast is now the nation's 3rd largest residential phone service provider. So, competition for residential dialtone services isn't just from VoIP, it's from cablecos and from wireless services too.

Alteva, from Philadelphia PA, is one of a very few successful VoIP services companies that have taken a very different tack in two ways, by focusing on the hosted enterprise VoIP market and by focusing on integrating the service with business workflows and applications. CEO, William Bumbernick, together with 45 employees has had considerable success with some 30,000 seats deployed in over 500 accounts. He speaks of a dual ROI – Return on Investment AND Return on Innovation. He argues that the naturally lower capex from hosting – 70% less capital required – when combined with the ability to use hosted communications services to transform critical business processes – customer sales or support services – Alteva customers can earn higher results on both metrics.

The greatest impediment to a successful customer installation is the recognition of demarcation of responsibility. The name-brand service providers don't include the LAN as part of their responsibilities. However, Alteva performs a validation process for network quality before services are enabled, and can make recommendations on what customers need to do to bring their network up to snuff, and have the engineering talent on staff to implement the upgrade for them too. Together with workflow integration, Alteva enables a 'sticky' service that customers find attractive and valuable. Alteva's NOC monitors customer network quality by accessing the Polycom IP Phone's quality agent and analyzing service quality in realtime. [See When Quality Counts report].

And since they use a commercially-available softswitch [[BroadSoft]], they are well-positioned with a stable platform and continued investment in new features. Other partners in the Alteva value proposition include Polycom for IP phones and endpoint quality management, Edgewater Networks for SBCs and Cisco for other infrastructural elements. Using transport and PSTN gateway services from Verizon and Level3 as part of their service architecture, Alteva has focused on the software and network engineering to make the implementation a success for customers. And customers who call other Alteva customers get a clean all-IP media path, something that many other VoIP service providers don't deliver. Some providers insist that every call goes through a PSTN gateway which of course degrades the signal quality with each passage over a gateway. HDVoice is only possible in an all-IP media path, since the transcoding at the PSTN gateway degrades the signal to satisfy the lower quality levels of PSTN's 'Toll Quality.'

The latest area of focus is on providing clients with more call intelligence and communications content analysis with announcements planned later in 2Q09. The company has international presence, but only to service US-based accounts with international offices. There are no plans for international expansion at this time. In the middle of a nasty recession, IT directors need to find ways to preserve cash. One way, of course is to go with managed services. One managed service is the hosted unified communications service. This is a natural and usually critical service that has been proven time and again as an effective solution for reducing cash cost of owning and operating corporate phone systems.

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