Louis D'Ambrosio became top guy at Avaya last July, making him only the company's second CEO since its inception in 2000, when Avaya was spun off from Lucent's legacy business telephony arm -- a group which created the first cell phone and packet PBX. At the VoiceCon show this week, D'Ambrosio spoke with Phil Hochmuth about changes at the company, its competitors, and the enterprise VoIP market.

What changes or initiatives have you put in place?

We've established three key priorities: strategy, execution and culture. What's most important is the interrelations between the three. From a strategy perspective, we're going from IP telephony and up the value stack. We're not interested on focusing on the infrastructure level. We're looking up the value stack, where we're embedding these core communications attributes into business processes, translating into major business impact. Acquisitions that we're making are very consistent with that. Ubiquity, Traverse -- they will all be geared towards that area. We are also reallocating our resources internally to focus on those areas. As of today, over 75 percent of our R&D now is spent on software development.

Why are we doing that? Just go to the constituencies. For our shareholders, it's where the profit pool will grow in the industry. For our customers, most importantly, it's a leveraging point for business processes. For Avaya, it leverages the strengths of who we are. We have a strong background in software. We're a Linux-based product. We have a compelling set of software attributes. In terms of execution, we talk about getting into fighting shape.

As opposed to the shape you're in now?

As opposed to not continuing to stay in fighting shape. It's a continual focus on how quickly our decisions are being made. Where are there cost efficiencies to be garnished? How can you move spending from back office to front office? At the end of the day a company does three things: It makes stuff, it sells stuff and it supports stuff. That's where the money should go. Getting into fighting shape is all about bringing the resources to those priorities in the business.

It's also about breaking down silos in the organization. We've put in place a Chief Learning Officer to do just that. To break down silos between products and services and sales. We're not trying to optimize at a silo-level.

The third priority is around culture. This is a big deal. . . . Culture is what contains a sustainable competitive advantage. One element of our culture is what I call the Avaya 6/100 advantage. We as a company on the one hand, have this rich heritage -- this 100-year, Bell Labs heritage and sophistication. At the same time, Avaya is a company that is only six years old, with agility, speed and entrepreneurialism. Putting that together, we're quite formidable.