Jim Machi is our Guest Blogger for the week and he is Senior Vice President of Marketing at Dialogic. Today he shares his views on “Mighty Morphing of the Network Border Element”
Network Border Elements connect two types of networks to each other, sitting at the edge, or border, of each network. Looking at the data below from Infonetics, you can see a trend developing from back in 2007.
The wireline service provider border element of choice back in 2007 was a gateway. Gateways are required to connect IP networks to TDM networks and deal with the media and signaling conversion between the two networks. When voice interconnects between IP and TDM networks, then we need a VoIP gateway to handle all the transcoding and signaling conversion. When video interconnects between these two networks, then we need a video gateway.
You can also see the SBC’s starting to come into the picture, as IP-IP network interoperability started to come into play. Since we don’t have a single gigantic homogeneous IP network, we need border elements on the edges of these IP networks to translate one type of IP signaling to another (for instance, SIP-I to SIP-T), and handle the media transfer, and also to handle the security so the networks can effectively be insulated from each other.
Together, these two type of edge equipment created a service provider border element market well in excess of $1Billion back in 2007, where it declined and is expected to climb well over $1B again in the future. (Note: If you want to get the full report with the actual figures, please visit the Infonetics website).
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 SBC’s 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, this becomes an avenue for continued growth of these SP SBCs. After all, SBCs came into fore with the introduction of the 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 would 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 of 2011, then border element growth starting again in 2012. What is going on here? Well, likely there are a few things going on here. 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.