Published: 15/08/2016
Author: Greg Collins, Exact Ventures

In 2Q16, the total (SP + enterprise) SBC market grew 7% sequentially and 9% Y/Y to reach $271 M.  During the quarter the enterprise (E-SBC) grew 20% Y/Y to $113 M, accounting for 42% of the total market, while the service provider (SP-SBC) segment grew 3% over the same timeframe.  The Y/Y weakness in the SP-SBC segment was due to unexpected weakness in the wireless sub-segment, a trend which we expect to reverse throughout the remainder of 2016 as VoLTE-related sales grow.

We forecast that total market growth will accelerate in 2016 to 22% as both the E-SBC and SP-SBC markets continue to benefit from an accelerated migration to IP services.  We expect that the wireless/VoLTE segment will grow by 44% for the year as VoLTE services continue to gain momentum.

screen-shot-2016-10-26-at-4-04-32-pmCisco remains the leader of the E-SBC market with 27% market share in 2Q16, which is down from 34% of the market in 2Q15.  In 2Q16, Oracle’s E-SBC revenues were up 25% Y/Y and accounted for 18% of the market during the quarter.  During the quarter AudioCodes E-SBC revenues grew 10% Q/Q 10% of the market. AudioCodes’s strength in the E-SBC market comes from Microsoft Skype for Business (formerly Lync) deployments.  In 2Q16, Sonus’s E-SBC sales rose 52% Q/Q to account for 5% of the market, up slightly Y/Y.  Edgewater has been successful at selling low capacity (<100 sessions) E-SBC for CPE applications particularly to cable operators in North America.  Many cable MSOs have targeted small businesses with hosted trunking and UC services.

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