For the third* time in 16 years, Avaya will be going public to sell $1 billion worth of the company (how much of the company that represents is not clear) as announced in a press release earlier this afternoon. Avaya is not the same company you might recall in recent times. It is the combined entity of Avaya and Nortel Enterprise with a much larger sales footprint in North America channels, managed services including telepresence professional services and the recently announced discontinued BCM (transitioning products, channels and customers to IP Office).

The other times Avaya went public: in 1995 Lucent, the equipment manufacturing arm of AT&T was spun out and then in 2000 the enterprise division was spun out of Lucent as the standalone entity, Avaya. At the peak of the last market bull run, Avaya was acquired in a Private Equity transaction in 2007.

What?

Avaya announced yesterday with some attempted fanfare that they've signed some kind of strategic agreement to interconnect their products with the global telephone company, Skype. Yawn. Isn't that what IP PBXes are supposed to do?Next.

Thankfully, I was being briefed by a few really innovative companies and missed the all hands on deck presentations. Instead, I spent my time reviewing features that very few companies are doing - not wasted listening to the trivial feature described as extraordinary. A little over-PR for my taste.

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I almost fell out my chair today. I heard from a friend (incidentally over Skype) that Cisco was planning to pre-empt Skype's IPO and wanted to acquire the service provider for as much as $5 billion. Then, I read about it on the Wall Street Journal, and over at CNet. What a joke.

I am down on this initiative for a couple reasons: Cisco-Skype would be competing with Cisco's biggest channels and customers, who have been loyally purchasing Cisco's margin-rich routers and switches for years. Those channels and customers have alternatives and likely will act to win.

Although some note that Skype could complement the WebEx service, the fact remains that Skype's operating philosophy is to avoid standards and focus on proprietary technologies and architectures. There are no technology synergies with Cisco products and Skype services. Cisco can integrate their products today with Skype today as part of the Skype developer program like many other IP PBX vendors have done, without having to spend 5 big ones.

If Cisco wants to pay too much to own a company that generates a little income, they'd be better off keeping it in the banks they have. In fact, Cisco would be better off BUYING A BANK. That way they can earn the spread on their money, instead of just the interest (zero or nearly zero today).

Frankly, Microsoft would be a better acquirer than Cisco, since it would give them millions more subscribers to add to their existing free services.