By Mithilesh Kumar

With Avaya's acquisition of Sipera--so soon following the establishment of an OEM and reseller relationship between Avaya and Acme Packet, and Siemens Enterprise's introduction of OpenScape SBC-- the UC industry has shone a spotlight on session border controllers. Once of interest mainly to telcos looking to better secure and manage SIP trunks, SBCs started appealing to enterprises seeking precisely the same thing.

SBCs continue to make their way into the enterprises mainly through service providers, which deploy them internally to secure their own network, as well as to enterprises as part of the SIP trunking services they subscribe to. But with three of the top UC solutions developers now possessing SBC products of their own (Cisco is the third), enterprises will start seeing SBCs pitched more regularly as a standard component of the overall UC solution.

There's been a considerable amount of activity in the enterprise SBC space in the past year. Developers of SIP-compliant PBXs have variously partnered, acquired or developed their way into the market. And smaller developers have seen in enterprise SBCs a means of entering new markets, adding new zest to an otherwise sluggish sales record, and perhaps paving a path to being acquired.

Enterprise SBC developers come from a wide range of backgrounds. Some developed routers for the enterprise, others voice gateways or VoIP security software. And developers of carrier-class SBCs have gone downmarket, trying--and very much succeeding--to sell into the enterprise space as well.

Whereas the market for carrier SBCs went through a period of consolidation in 2005-2006, the market for enterprise SBCs is ripe for consolidation now. If I were a betting man, I'd lay odds on 2012-2013 being the years that we’re going to see a number of the many--20 by some counts--small enterprise SBC developers either get acquired or go out of business.

Here's a snapshot of the formal business relationships in place between enterprise communications vendors on the one hand and enterprise SBC developers on the other. It's not meant to be comprehensive, so go ahead and pencil in those I’ve overlooked...or better yet mention them in Comments.

And now a look at interoperability verification that various enterprise SBC developers have done with enterprise vendors' SIP-based communications systems. Again, not meant to be comprehensive.

So just how big of a pie are all these companies vying for? Infonetics Research--more specifically Matthias Machowinksi--has made a special study of this. His figures reveal a small but rapidly growing market that has more than doubled in size in the last five years. And looking forward, the hockey-stick growth curve seems like it will remain firmly in place.

Links:E-SBC market is ~$40 million7 out of 10 E-SBCs sold to businesses in USE-SBC market is ~$61 millionE-SBCS market jumps 70%: ~$103 millionAcme Packet has 32% of E-SBC market; doubles its E-SBC businessAcme Packet & Cisco account for more than 50% of E-SBC marketSipera and InGate in #3 & #4 spots SBC market is $541 millionIn Q1 E-SBC market grows 55%E-SBC market projected to be ~$300 millionE-SBC market to grow to ~$500 million

To put things into perspective, the nascent market for enterprise social software is already more than six times the size of that for enterprise SBCs. The Text that's linked video conferencing systems market is $2.2 billion annually, while enterprise telephony systems rakes in about the same amount per quarter. And the market for SBCs deployed by service providers is nearly $300 million and projected to rise to $1 billion before long.

The point being, it's a comparatively meager pile of money that developers of enterprise SBCs are grasping at.

Links: Enterprise telephony & UC equipment : $2.52 billionEnterprise video conferencing & telepresence systems: $2.2 billion in 2010...$680 million just in Q3 2011Enterprise social software: $664 million in 2010

So given all the market activity and the rising importance of SIP in today's communications networks, why is the enterprise SBC market so tiny? Part of the problem is that a lot of what enterprise SBCs do is already done by other network elements. Edge routers can terminate SIP trunks. Gateways can provide interworking. A variety of security appliances provide varying degrees of protection. Session managers manage sessions. And various application software provides call recording, call accounting, billing and similar services that can now run on enterprise SBCs.

While it can be argued that enterprise SBCs consolidate processes, doing them better in a more cost-effective way, this doesn't detract from the fact enterprises need to make new capital investments and to some degree redesign their communications networks to accommodate them.

Another reason for the market for SBCs being comparatively small: SIP is still not widely adopted enough to warrant widespread adoption of enterprise SBCs. Wait, I didn't phrase that quite right. It's not that SIP isn't widely adopted, it's that SIP isn't used end to end across communications networks. Plus, each vendor and carrier has implemented SIP slightly differently, leading to wide-ranging compatibility issues among systems and services that can all say they are based on the standard.

Contributing to the problem is all the finger-pointing among vendors that accuse their competitors of not developing to the SIP standard. This makes adoption of SIP-based systems and services unnecessarily complicated, which stymies adoption, which retards demand for enterprise SBCs. And while the market for SIP trunking services is clearly on the rise, it remains a fraction of the larger market for VoIP services. Until SIP trunkingbecomes more mainstream, enterprise SBC sales are likely to suffer.

LinksLinks: ...enterprise customers were not ready to natively support SIPRevenues from SIP trunking services grew 143% in 2010...but SIP trunking makes up only 1% of the overall $50 billion VoIP services market-- Infonetics$2 billion - Size of SIP and VoIP trunking services market--Frost & SullivanLack of a widely adopted SIP trunking standard among service providers is an impediment to enterprise adoption. Farzin Shahidi, NextPlane

Despite this, the future in fact looks bright for the burgeoning market for enterprise SBCs. Prices of systems are being driven down, in part because of competition among enterprise SBC developers. This will fuel enterprises' continued interest in deploying them. Enterprise adoption of SIP trunking services remains on the rise, with major carriers now offering SIP trunking services of their own. And with all business communications solution developers now offering enterprise SBCs--whether their own or a partner's--for their SIP-compliant platforms, businesses' adoption of them is likely to increase steadily.

Links:"...the market for enterprise SBCs remains fragmented....""Without E-SBC, the adoption of SIP, UC and SIP trunkingbecomes a difficult process..."

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