During the quarter the service provider (SP-SBC) market rose 21% Y/Y to $189 million. The SP segment was driven by wireless/VoLTE revenues which surged 64% compared to 4Q15. We expect that VoLTE will continue to drive the SP-SBC market in 2017, growing 50% to $480 M for the year.
The enterprise (E-SBC) market grew 15% Y/Y to $134 million as SIP trunking and hosted UC services continue to fuel market growth. We forecast continued strong growth for the E-SBC market for 2017. Specifically, we expect that the E-SBC market will grow 19% to $570 million.
Similar to nearly all other core networking markets, the SBC market is transitioning away from physical network functions, largely based on ATCA or appliance platforms to software-only virtual network functions (VNF) and then to cloud. We forecast that in 2017, the VNF and cloud will account for 21% of the market and that this will increase to nearly two-thirds in 2020.