I've seen several mentions of Avaya stock being downgraded in the past two days.

Before I go too much farther, let me interject a disclaimer. While I've never worked for  Avaya, I did spend 17 years with AT&T and Lucent Technologies. During that time, I designed Definity networks for many private sector and federal customers while with both AT&T and Lucent Technologies. I designed systems, configured them, and project managed implementations for a lot of systems. I left Lucent to pursue other things before Avaya was spun into existence. I've never worked for Cisco, but have had very close working relationships with Cisco for many years.  I've taught Cisco certification classes and helped at least one company become a Cisco certified resellear partner.

Here's the information from Forbes about the stock downgrade:

Avaya Faces Strong VoIP Competition From Cisco
Kate DuBose Tomassi 02.14.06, 4:44 PM ET

Standard & Poor’s Equity Research analyst Ari Bensinger downgraded shares of Avaya to “sell” from “hold” to reflect a “more challenging operating environment” for 2006.

The analyst said declining demand for TDM [time-division multiplexing] products and sluggish service sales continue to hamper overall revenue growth for Avaya (nyse: AV - news - people ).

In addition, Bensinger said he sees strengthening competition in the voice-over-IP field, especially from “network rival” Cisco Systems (nasdaq: CSCO - news - people ).

The analyst lowered the price target on Avaya to $9 from $11. He also lowered earnings-per-share estimates for fiscal year 2006 to 51 cents from 58 cents.

The first mention I saw about the was from Ted Wallingford who said:

I've always considered Avaya Definity to be a superior product to Cisco CallManager. Both are IP-PBX platforms, both are quite scalable; both support interfacing to legacy telephony and to VoIP using H.323, SIP, or whatever protocol suits you. In the end, a Cisco solution might cost a bit more to integrate because of CallManager's highly-distributed footprint, but these are both very capable systems.

In many ways, I have to agree with Ted, but I feel compelled to introduce a different perspective for consideration.

First, Ted's absolutely right. Both the Avaya and Cisco solutions are solid, scalable solutions that can support what you need to get the job done. These are top-notch products with a rich feature set. Ted leans toward Avaya as the superior product and I don't intend to refute that in any way. Go read Ted's post for his full view. Trust me, it's worth your time.

There's much talk today about VoIP, but for some of us, there may still be a distinction between VoIP and IP Telephony. I can make a pretty compelling argument that if you digitize and packetize a voice stream, that's VoIP. Voice over IP. It's simple. It's not new. It's actually been around since the 1960's. Telephony, on the other hand, implies a rich set of protocols, features and functionality the emulates, in some fashion, both the Public Switched Telephone Network (PSTN), and the universe of PBX and key systems used in business.

Telephony includes conference calling, videoconferencing, music on hold, call forward, call transfer, and a plethora of other features. It implies the richness of Q.931 signaling, H.225, H.235, T.120, codecs, SS7 and more. Telephony is a complex technology that's over one hundred years into its evolution.

Corporate culture drives behaviors in companies. These behaviors drive how products evolve in many cases.

Avaya is, from its roots and heritage back to Alexander Graham Bell, a telephony company. Steeped in all the overhead and history of telephony, Avaya approaches VoIP from that perspective. Like other telecom companies, at times the approach has been to take existing telecommunications features and tools and mold them into an IP framework.

Cisco, is from its roots and heritage, a router company. A networking company with a heritage of IP networking. Like other networking and router companies, Cisco approaches VoIP from that perspective, working to extend IP to embrace the features and functions of telephony.

And both companies raid the brain trust of the other, hiring expertise away at every opportunity.

I can't tell you how many times over the last 25 years I've heard data people say voice is easy, and voice people say data is easy. For many years I was one of the very few hybrid people who knew the truth. Both are easy. Both are hard. Neither rides for free on the other network. Voice and data networks were each designed to perform specific purposes. Convergence takes a strong technical understanding of how both work.

But even converged solutions carry a genetic marker of some sort identifying its roots. And that's the biggest differentiator between companies like Avaya and Cisco.

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