this has been coming for months, they are restructuring as a software company. My guess is they will kill the IPO and move to server only edition. If you looked at their website over the past year or so they killed links to SMB. They just put stuff back recently. They'll probably let hosted space take all the SMB market share as thats where that is heading anyway. Id guess they'll look to stay competitive in the enterprise space like Skype, but i just can't see any CIOs of enterprise companies investing their telecommunications in a company that just filed chapter 11.
Avaya's niche was the SMB market with cisco holding the advantage with enterprise. I just don't see how they could restructure appropriately in time while simultaneously going up against other platforms. Eventually money runs out and this is what happens.