Avaya is said to be in talks to form a joint venture with RingCentral, people close to the matter have told Bloomberg.
RingCentral is a publicly listed company that specialises in providing video conferencing software for SMBs.
Last month, Bloomberg reported that Mitel had made a bid to takeover the beleaguered Avaya, proposing a reverse merger that would result in a telecommunications vendor worth over $5bn.
However, Avaya is now in talks to partner with RingCentral, which would mean abandoning any plans to sell the company. The sources added that there is still a possibility that those talks could collapse and the outcome of the strategic review remains uncertain.
In its Q3 earnings report in August, Avaya CEO Jim Chirico told investors that the company was in talks with a number of parties "on a range of strategic transactions to maximise shareholder value".
He said at the time that he expected the strategic review would conclude within 30 days, but that timeline has now expired.
That strategic review is still in place the vendor confirmed in an update, though it did not disclose on when it would now end, only that it was working to hasten the process.
"Avaya's…review of a range of strategic alternatives is ongoing and it remains in advanced discussions," the statement read.
"Avaya's board of directors and management, supported by its legal and financial advisors, are working expeditiously to conclude the deliberate and comprehensive review.
"There can be no assurances regarding the timing of any action or transaction nor that the strategic review process will result in any particular outcome.
"The company does not intend to provide additional updates unless or until it determines that further disclosure is necessary."
Avaya's saw its share price drop 11.5 per cent - its biggest since May - just before the news emerged and shares have remained flat since.
RingCentral enjoyed an initial four and a half per cent bump in its stock on foot of the news, though it has since declined slightly.
Reports emerged earlier this year that Avaya was seeking a private equity-backed buyout to the tune of $5bn.
The company has had a turbulent few years which have seen it go into bankruptcy, flog its networking unit to Extreme Networks, emerge from bankruptcy and float on the New York Stock Exchange.
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