SBC Market Growth in Overdrive to 2024
William F. Buckley Jr., in 1983, wrote a book describing his life moving at ever faster speed while requiring less effort; he called it "Overdrive." I see the session border controller global (SBC) market and its acceleration similarly.
I'll use this space to address SBC market acceleration, what's occurring, where, and how -- covering the period between today and 2024. I'll draw on findings from a just-published Eastern Management Group study and report, "2018-2024 SIP Global Market 7-Year Forecast and Analysis," researched and analyzed using data provided by 40,000 IT managers, and our models.
Significant untapped potential exists in the SBC market, though the groundwork has been laid. The groundwork includes:
- 98% of all businesses have SIP capability on new phone systems acquired in 2018; this is up from 88% five years ago in 2013
- SIP trunks are now used by nearly 70% of businesses
- The hosted PBX market is growing like kudzu; some of this is precipitated by customer branch offices that link to a mothership-PBX, with SIP trunks and SBC gatekeepers
In 2018, 17% of all businesses worldwide use SBCs, meaning there is a significant untapped market for them.
Which SBC Providers Are Contenders?
Fourteen major providers collectively dominate SBC sales, yet the total number of vendors is larger and growing. The barriers to market entry can be low, even for startups. One explanation is the availability of open source software such as Asterisk, from Digium (now a Sangoma company), and others. A second is the availability of venture capital. A third is the integration of SBCs into other communications products. There are more reasons than that, but I won't dwell.
Cisco is one of many dominant SBC providers. Avaya and Oracle (with Acme Packet) likewise hold commanding positions and are well-liked by IT managers who use their SBCs. Oracle, in a recent SBC customer study by Eastern Management Group, rated number-one for Technology and Product. Other vendors often excelled in different measurements.
Then, there are several less-known SBC providers that customers -- often tier two and three service providers, and small businesses -- shouldn't ignore when shopping for SBCs. For example, Metaswitch is the only SBC that scored a perfect 100 Net Promoter Score in Eastern Management Group's SBC customer satisfaction study. Sangoma received multiple four-star ratings from its own customers in the same survey (see related No Jitter post). TelcoBridges, a caterer to service providers, offers a freemium SBC model and boasts an impressive customer list that includes SK Telecom and Windstream.
The SBC customer base comprises carriers and end users. We studied SBC market penetration in 19 vertical industries -- these 19 verticals are a platform for Eastern Management Group models. Service providers are the largest group of SBC purchasers. Then comes the remaining industry markets, including the important professional services industry, which accounts for 10% of SBC customers.
The SBC business is quite strong in small and mid-market organizations, with fewer than 500 employees. Ten to 50 employees are the sweet spot of vendor opportunity.
The U.S. is, for now, the biggest SBC market and accounts for almost 40% of all sales. As with all SIP technologies, however, Western Europe is the powerhouse. The Eastern Management Group is bullish on Middle East and Africa potential, which today finds just 7% of businesses using SBCs.
Where does the overdrive reference at the beginning of this piece fit in? In 2024, the end of our seven-year forecast period, SBC growth is still increasing year-over-year and is now up to 8% annually; SIP use is higher in all theaters, and that translates into larger numbers of SBCs being used and sold.
The Eastern Management Group's "2018-2024 SIP Global Market 7-Year Forecast and Analysis" report is available. For questions please ask our researchers or contact [email protected] directly.