In 3Q17, the total SBC market grew 6% versus 3Q16. The E-SBC market drove the growth via 13% Y/Y growth as SIP trunk services continue to drive demand for E-SBCs to provide security, protocol normalization, and quality-of-service for SIP trunks and hosted UC services. We expect that the market will grow 15% for the full-year of 2017 and accelerate slightly to 18% in 2018.

During 3Q17, the SP-SBC market fell 1% compared to 3Q16. Per historical operator spending patterns, we expect that the SP-SBC market will recover to grow 21% sequentially and 15% year-over-year in 4Q17.  We forecast that the full-year SP-SBC market will decline slightly in 2017, but that the market will recover in 2018 as VoLTE continues to gain momentum worldwide and the shift to virtual and cloud-based network functions begins to take hold. As of 3Q17, the vast majority (80-90%) of session shipments are of physical or appliance-based systems.  Most of these sessions are destined for preexisting networks. However, new deployments – both for growth and replacement – are predominantly virtual and cloud-based thus the market will shift in the coming years as legacy systems are replaced.