We forecast that the SP-SBC market will grow by a 24% CAGR through 2020, driven by wireless/VoLTE deployments.  The wireline segment is expected to be essential flat during that timeframe as increases in session shipments are offset by price declines.

Like 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.

The Enterprise SBC category is expected to increase by 17% per year CAGR through 2020 driven by SIP trunk and hosted unified communications or cloud communications services.  Like the SP-SBC category the E-SBC category will gradually migrate to the cloud with the E-SBC becoming another virtual CPE services.  Specifically, we expect that the virtual and cloud-based E-SBC market will account for approximately three-quarters of revenues in 2020, up from nearly one-third in 2017.