Avaya this week is scheduled to announce a parcel of IP PBX advances, including a new midsize system, and unveil a licensing scheme that analysts say shows the company's mindset shifting from hardware to software.Avaya \u00a0this week is scheduled to announce a parcel of IP PBX advances, including a new midsize system, and unveil a licensing scheme that analysts say shows the company's mindset shifting from hardware to software.The midrange box plugs a hole in Avaya's IP PBX product line and smoothes out the company's scalability story, while the new IP PBX license will change the way companies buy telephony to more of a software-based model.Together the developments signal to some observers the beginning of the end for Avaya's traditional TDM-based Definity line, particularly at the midrange.New products on tap from Avaya include:\u2022 The S8500 Media Server, a Linux-based call processor that supports up to 3,200 phones.\u2022 Communications Manager 2.0, an upgrade of Avaya's IP PBX operating system, with improvements in encryption, Enhanced-911 support, and features for extending PBX functionality to cell phone users.\u2022 Avaya Modular Messaging 1.1, a unified voice server that combines Avaya's two voice mail servers with its Unified Messenger interface for Microsoft Exchange and IBM Lotus Domino.\u2022 The G350 Media Gateway, a branch office device that combines voice over IP (VoIP) connectivity, LAN switching and WAN routing into one box that supports 40 lines. "The [S8500] fills a very large gap in Avaya's Media Server product line," says Brian Riggs, a research director with Current Analysis. He says Avaya's S8300 Media Server supports up to 500 users, but the next jump was to the S8700, which maxes out at 36,000 endpoints and starts at $20,000. The $6,000 S8500 is an interim step between the two.Charter Steel of Saukville, Wis., recently installed S8500 Media Servers and Communications Manager 2.0 at two offices in an eight-site WAN, which includes TDM- and IP-based PBXs from Avaya and 1,100 phones. The S8500s connect to Avaya Definity PBXs and G700 Media Gateways throughout the network, providing for a single, company-wide dial-plan and directory.Charter went with the S8500s because it needed to add more users at two sites but didn't want to expand its existing Definity switches. That would have required buying expansion cabinets that probably never would be used to capacity, says telecom supervisor Peter Schwei."This lets us mix and match IP and digital handsets" and add phones on a per-user basis, Schwei says. The new licensing scheme for Communications Manager 2.0 - the software that runs on the S8500 - lets Schwei add users incrementally at a fixed price without having to buy expansion cards that have more ports than he has phones.Among the new features in Communications Manager 2.0 is support for Advanced Encryption Standard (AES). The 128-bit AES improves on Avaya's current, proprietary 102-bit VoIP encryption used to secure IP voice signaling and IP voice traffic. AES also will let Avaya's products interoperate better with other AES-based security products, such as firewalls and VPN gear, the company says.Communications Manager 2.0 also includes support for Enhanced-911. This lets 911 calls placed from an Avaya IP or TDM phone be traced to the physical location of the phone, down to the floor, department or cubicle.Licensing shiftThe licensing twist with Communications Manager 2.0, analysts say, is it is based on end users instead of ports and is a major shift from Avaya's per-port licensing practice.Avaya now charges $300 per user for multi-site Communications Manager deployments, where a centralized IP PBX manages IP and TDM phones across a WAN. The per-use cost of single-site enterprise licenses, with no WAN trunking, is $200.These prices are the same for Communications Manager 2.0 across all hardware platforms, whereas Avaya used to charge different per-port prices depending on various hardware configurations."Avaya is shifting the price of its hardware - cabinets, boards and processors - to software," says Allen Sulkin, an analyst with TEQConsult Group. "This way, hardware prices are much lower than buying traditional Definity gear, but the per-line licensing is much higher."Sulkin says the move to standards-based processors and operating systems, such as Intel and Linux, with IP as the transport, are fueling this change.Avaya broadens its menu Among the new Avaya VoIP offerings on tap this week are: Avaya Communications Manager 2.0 software for all Avaya IP PBXs. New features include: AES encryption of voice and signaling traffic, Enhanced 911 support, support for cell phones. Avaya Modular Messaging 1.1, a unified voice server platform. Combines both Avaya Intuity, Audix and Octel voice mail platforms with its Unified Messenger interface for Microsoft Exchange and IBM Lotus Domino. S8500 Media Server \u2014 $600 A Linux server-based IP PBX for midsize to large companies with up to 3,200 IP or digital lines. Can support up to 250 remote-office Avaya Media Gateways (existing G700 or new G350). Avaya G350 Media Gateway \u2014 $2,800 A small-\/branch-office device that includes a VoIP gateway, an IP WAN router and a 48-port power-over-Ethernet LAN switch that can support IP or digital phones. Also can be installed with a back-up local call processor ($3,000 extra) "Eventually, Avaya may not sell you any hardware at all," Sulkin says. "You could buy your own server, just load [Communications Manager] on there, and get [Session Initiation Protocol] phones from Radio Shack."Current Analysis' Riggs sees the new pricing structure as a benefit for users. "This is much simpler, which should help Avaya's sales," he says. Riggs says when shopping for VoIP, most datacom executives - likely more familiar with per-user software licensing - probably didn't understand Avaya's telecom-centric pricing with different fees for TDM and IP stations.With a clearer-cut IP licensing scheme and Avaya's IP portfolio filled out, analysts also see its moves as the beginning of the end for Definity."Within the next year, they'll probably begin to end-of-sale [Definity], starting with the midsize models," Sulkin says. "There's a difference between selling and marketing [the Definity systems]. They may still have Definity hardware available, but they aren't marketing it."While Avaya says it will continue to sell and support Definity hardware - including processors, telecom cabinets and digital cards - the company says it is de-emphasizing the products."You can still buy Definity," says Lawrence Byrd, an Avaya vice president and convergence strategist. "We have no immediate plans to stop selling Definity. But we feel [customers] get more value out of our IP-based systems."