Enterprise Session Border Controller Market on the Rise

By Joe Rizzo
TMCnet Contributing Writer

Earlier this week, international market research and consulting firm, Infonetics Research (News - Alert) released excerpts from its quarterly report entitled “Enterprise Session Border Controllers” which looked at third quarter market shares for 2014. The report tracks and forecasts eSBC session shipments and vendor revenue.

Session Initiation Protocol or SIP trunking is the use of Voice over IP (VoIP) to facilitate the connection of a private branch exchange (PBX (News - Alert)) to the Internet. Essentially, the Internet replaces the conventional telephone trunk, allowing an enterprise to communicate with fixed and mobile telephone subscribers on a worldwide basis.

A session border controller (SBC) is a dedicated hardware device or software application designed to oversee the manner in which phone calls are initiated, conducted and terminated on a VoIP network. In this instance, phone calls are referred to as sessions.

Over the past year we have seen a lot of improvements in VoIP technology, which is offering businesses, regardless of size, a lot of flexibility and cost savings. The third quarter report highlights the following facts:

• Businesses of all sizes are starting to adopt SIP trunking, and in 3Q14, enterprises with less than 800 employees made up the largest segment of enterprise SBC sessions, with 68 percent
• Infonetics projects the global enterprise SBC market to grow to $356 million by 2018
• Cisco headed the pack for eSBC vendor market share in 3Q14, while Oracle (News - Alert) had the most robust quarter of any eSBC vendor, posting a 26 percent sequential revenue gain
• There remains strong upside potential for eSBCs, as they are the next generation of border elements and will eventually replace the TDM-to-VoIP gateways in use today

Diane Myers, principle analyst for VoIP, UC and IMS at Infonetics and also the author of this report, had the following remarks, "The use of enterprise session border controllers (eSBCs) is becoming more main stream with the adoption of SIP trunking services, where SBCs are used as a border element between enterprise and service provider networks. In the third quarter, global eSBC revenue totaled $73 million, up 11 percent over the year-ago third quarter. North America continues to be the number-one region for eSBCs, but enterprises in other regions, particularly Europe, are accelerating adoption of SIP trunking and this is anticipated to positively impact eSBC sales outside North America."

Myers feels that once the numbers are in, we can expect that the global SIP trunking services market will grow to 35 percent when the fourth quarter results come in, making it a $4.4 billion market. Myers noted that, “There is no denying the world is moving to IP and SIP has become the de facto solution of choice for businesses for IP connections. In North America, slightly more than 20 percent of the installed business trunks are SIP trunking today, with significant upside opportunity.”

Edited by Maurice Nagle