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SBC Market On Fire: New Sales to Increase 60% by 2024

A new global research study by the Eastern Management Group finds that 18% of U.S. businesses now use session border controllers (SBCs). We expect this number to grow 60% between now and 2024, with a massive boost coming from cloud applications and, particularly, server virtualization.
According to our research, published in the "2018-2024 SIP Global Market 7-Year Forecast and Analysis” report, enterprises in all world regions use SBCs today; besides the 18% of businesses in the U.S., this includes 19% in Canada, and more than 20% in Western Europe, Eastern Europe, MEA, LATAM, and APAC. Businesses in the U.S. are the largest buyers of SBCs.
Worldwide demand for SBCs is growing at 7.6% year-over-year in 2019. SBC shipments will continue gaining ground over the coming years, reaching 8% annually by 2024, according to Eastern Management Group models. By way of comparison, business spending on all IT is up 4.3% year-over-year in 2019, about half the growth rate of SBCs.
Driving SBC growth is a combination of technology and enterprise needs. On the technology front, there’s a significant rollout of SIP products and IP networks. SIP and IP are more efficient than PSTN, and telcos are tearing down their old, expensive TDM facilities; IP networks are the go-to transport service. IP PBXs, server virtualization, hosted and hybrid cloud, contact centers (particularly home-based agents), and interworking with Web real-time communications (WebRTC) all play a role in SBC’s growth.
At the enterprise level, SBCs primarily handle five needs or functions: 1) security, 2) intelligent session control, 3) SIP interoperability, 4) media transcoding, and 5) scalability.
Largest Customer Market
Eastern Management Group research shows that small businesses are an SBC sweet spot. Companies with 11 to 50 employees account for about a quarter of all organizations using SBCs. This is the largest group of buyers when measured by employee size. The next largest segment is businesses with 100 to 500 employees; this segment includes mid-market companies. This isn’t to say enterprises don’t require SBCs; they also do, and buy lots of them. These market numbers are based on data we collected from almost 3,600 IT managers.
In terms of vertical markets, businesses in the commercial sector make up half of all SBC customers; the commercial sector comprises six vertical industries -- banking and finance, communications, energy and utilities, hospitality, insurance, and professional services -- tracked by Eastern Management Group. Companies in manufacturing, processing, and eight other vertical industries we track as part of the industrial sector account for one-third of today’s SBC buyers. Government, education, and healthcare businesses represent the remainder.
Customers Really Like Some SBC Providers
The Eastern Management Group monitors 36 SBC companies. They range from the familiar names Cisco, Avaya, and Adtran to emergent players like TelcoBridges, Frafos, and Pascom. According to our new customer satisfaction research, "2018 Session Border Controller Customer Satisfaction Report," IT managers report the highest SBC satisfaction with Adtran, Alcatel-Lucent Enterprise, Avaya, Dialogic, Huawei, Ingate, Metaswitch, Oracle Communications, Ribbon, and Sangoma. The same study finds customers are most likely to “recommend to a friend” these companies: Metaswitch, Alcatel-Lucent Enterprise, and Sangoma.
This all goes to show that for an SBC market that is both hot today and multiplying, there are many exceptional choices and supporting data to take the risk out of decision making by the enterprise customer.
The research used in this post comes from the following Eastern Management Group sources: "2018-2024 SIP Global Market 7-Year Forecast and Analysis” and "2018 Session Border Controller Customer Satisfaction Report." For more information on these studies and reports, please contact our analyst team or John Malone directly at (212) 738-9402, ext. 2201 or [email protected].