(Updated 7/30) In a whirlwind set of developments, the process of accepting Avaya’s bid is destined to be protracted. So far a joint venture between private equity firm Gores Group and Siemens AG is treating Avaya’s $475 million bid as an opener (not the end of the bidding process). Also the Canadian Government and the bankruptcy court have yet to chime in.

A relatively paultry $475 million is the amount accepted by Nortel from Avaya as a “stalking horse” bid. FYI: The “stalking-Horse” term refers to an initial bid on a bankrupt company’s assets from an interested buyer and accepted by the bankrupt company. During the course of the selection process Avaya selected a $650 million bid from Nokia-Siemens for some of its wireless assets. The piecemeal divestiture continues as the stock price languishes below $1.00.

(No sale will be final until all bids are evaluated by the bankruptcy court and the winning bid is approved. This process could take another 10 days.)

In terms of the “fit” between Nortel and Avaya, you could say both companies have taken steps over the last few months to assure their respective legacies. Nortel has made an announcements just last week about the progress it’s making with Microsoft around the Innovative Communications Alliance, demonstrating that it is very partner friendly and has inroads into enterprises with .Net and OCS 2007 R2 running in the data center. It also announced that a new version of its core UC offering, the Software Communications Server (SCS) is packaged to be “scalable”, meaning more attractive to small/medium businesses (SMBs).

As for Avaya, the move to the Aura architecture is being undertaken to keep a semblance of control in geographically-disperse, media-diverse and multivendor environments. In addition, Avaya had success in luring nearly 20 of Nortel’s network of value-added resellers (VARs) into the Avaya fold according to this story by Andrew Hickey in CRN.

Enterprises can now be sure that the Nortel product line will be supported by a company that is solvent. Of course it will take some time to sort out the evolutionary path of the combined entity’s product lines and the “roadmap” from here to the future. Avaya is well suited to absorb Nortel’s product lines into its “cloud-based” telephony environment, Aura. Both companies had made significant commitments to standards like VoiceXML (and XML in general), and they had forged relationships with essentially the same batch of system integrators and IT infrastructure providers – especially IBM and Microsoft.

Nortel’s decline has been like a slow-motion movie. Avaya has had a long time to plan for this transition.

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Tags: Recombinant Telephony, Avaya, Nortel, IVR, Contact Centers