RealTime IT News

Covad Joins Compaq in Broadband Deal

Digital subscriber line (DSL) provider Covad Communications has agreed to sell it suite of small business services to Compaq Computer . The financial terms of the deal were not disclosed.

The agreement comes at a time when Covad's main competitor, NorthPoint, is selling its DSL technology at a much lower price than the California-based company.

However, in the highly charged competitive DSL landscape, where phone companies are expected to dominate the foreseeable future, Covad is working fast to carve out a deeper niche for itself with the small business market. Hence the deal with Houston-based Compaq, which cut 5,000 jobs last month, but has a widely recognized brand among consumers.

In short order, the duo will offer a high-speed broadband connection service for small shops and Compaq dial-up services for customers without DSL availability in their area.

In a statement, Bob Brewer, Compaq's vice president, Internet services and eCommerce, said the company would offer small business applications, including customer and financial management tools to provide a "complete small business IT department without the overhead."

Last month, Compaq said it would merge its commercial and consumer PC operations into a single group. The company has been focusing attention on powerful business computers, storage and devices, as part of its strategy to maintain margins in the midst of the slowing U.S. economy and a drop in PC buying.

In part, today's announcement reflects the company's determination to aggressively sketch out a way to increase its share of the overall information technology market.

And Covad is a sensible broadband connectivity choice for the PC hardware and software manufacturer.

In March 2000, as a result of its acquisition of LaserLink.net, Covad ramped up subscriber services, including registration, fulfillment process, connection and Internet software, network authentication, E-mail, Web hosting options, subscriber billing and reporting, and customer service and technical support.

Covad offers DSL, IP and dial-up services through telecommunications carriers, enterprises, affinity groups, PC OEMs, application service providers, and Internet service providers that resell Covad DSL to homes and small businesses.

As telecoms begin closing in, and sewing up the DSL market, deals that target small segments of the industry may be the soundest strategy to pursue.