In last week’s blog, I introduced this graph showing the history and expected trends for network border elements - the Media Gateway and the SBC.



Graph derived from Infonetics data, November 2011

There are two interesting things going on in this graph.  First of all, you see the gateways declining and the SBCs growing as time goes on.  This makes sense since as more and more IP networks are deployed, SBCs are required to connect them to each other.  Wireline IP voice-based networks, such as cable networks, and telco data backbones being used for VoIP, have been driving service provider SBC growth.   Adding value-added services to these networks helps drive Access SBCs.  And as LTE starts to get deployed, with the IP network this brings, there is an avenue for continued growth of Service Provider SBCs.  After all, SBCs came into fruition with the introduction of IMS networks.  As these IMS, or IMS-like networks, get deployed, we need SBCs.  Hence, we see SBC past growth and continued expected growth.

At the same time, it makes sense that the service provider gateways will decline.  While connecting to TDM networks is critical and we see continued sales of gateways, the number of new ports required to do this just isn’t sustainable in past numbers.  New TDM networks aren’t being deployed so connecting to them isn’t a growth business. We still need gateways to connect to existing ones as more VoIP is deployed, or we need expansion as more VoIP is deployed (see my blog two weeks ago on Skype), but just not at the same rate as the past.

I would even predict that we’ll see the marriage of media gateways and SBCs for a combined gateway/SBC border element, since in some cases this would make the most sense when VoIP is deployed in both a TDM and pure IP network scenario.  These products would likely come from vendors with both TDM and IP experience, such as Dialogic.  The pure IP vendors would continue to insist the world is conveniently only IP.

But there is another thing going on here, which is an overall border element decline with a nadir in 2011, then border element growth starting again in 2012.  What is going on here?  Well, likely there are a few things happening. First of all, we are seeing the effects of the recession and overall economic uncertainly in these declining timeframes.  But I also think we’re seeing something else, which is the realization from the service providers that they didn’t need the wireline gateways in the numbers they had in the past, but they hadn’t quite rolled out IP networks yet and thus didn’t need the service provider SBCs in the numbers they need now.