The answer is not as clear as it used to be. Those Fax Servers are pretty expensive to own and operate. Fax Services can reduce the hassle for a fat fee. And hey, it’s 2007 and we have email. How much longer will we need fax anyway?

In 2006, the fax server market sputtered at 0.4% to $280 million whilst the fax service market ballooned 26.4% to $570 million (two market research reports by Davidson Consulting). So lots of folks are using Fax. Fax upgrade and consolidation of existing fax equipment may be another consideration. Do you spread them out all over the company (decentralize) or have one big fax server (centralize)?.Perhaps it is prudent to have two fax systems (redundancy) in case one fax system goes down. What are the hidden costs? But if you use a fax service you don’t need all that equipment and people to keep it running.

Before deciding it is paramount that you understand what you fax (send and receive) why you use fax, and how you presently fax information! Once you have the answers to those questions, a quick briefing on the different fax systems will help you decide what is best for your company.

Many use production fax application to automate the unattended sending of hundreds of purchase orders overnight, potentially saving a bundle in labor and mailing costs while getting the purchase orders out to buyers quickly. Invoices faxing is a popular automation trick as well. Production fax accounted for 33.7% of all fax server installations in 2006 and accounted for $86 million in fax services. You can handle this type of application from either a fax server or a fax service, although many managers will feel more comfortable with an in-house solution because of a belief that it is insecure to ever have that type of data on an outside server. Nonetheless, many enterprises decide to go with a fax service to handle all their faxing needs, including production faxing.

Inhouse fax server or Outsourced fax service, using an automated fax system can enabling you to better manage your fax activity. Example: users can send files directly from their desktops, without having to walk to a fax machine, saving you money in time and labor costs. Moreover, it means that every file your people fax can be automatically archived, a key requirement of many compliance regulations like HIPPA (Health Information Portability and Accountability Act) and Sarbanes-Oxley. Finally, every fax is automatically received in email, which means that faxes are not sitting as paper in fax machine out-trays and they, too, can be automatically archived for future reference.

Fax Servers Are…

A fax server is comprised of server software that runs on a server and client software that runs on desktops. The fax server market is expected to grow at an 8.2% compound annual growth rate to $400 million in 2010. The client software is what end users see and use. Typically, this client software is installed from a central point on the network. There is no need to install a separate client on every desktop. There is conventional client software and then there is web fax software. Client software allows users to send faxes and to receive them, as well as manage their personal activity. Client software either allows users to send from personal applications in the same manner as printing, or it allows users to use their email interface to fax their documents. Typically, users can integrate their client software with any Microsoft application (e.g., Word, Excel, PowerPoint, Access) and often many other applications as well. Senders can attach multiple, mixed file attachments to a fax and they are converted to image files. Receiving faxes is as simple as opening an email. Web fax client software is simply a web site that users access. Therefore there are no installation hassles involved. Workers simply go the web site every time they want to send or retrieve a fax. Often a web fax client will not have every single feature that a desktop client has, but web clients are catching up. And web clients are compatible with every type of desktop.

Fax server software handles the management and maintenance of a company’s entire fax operation. Server software typically is compatible with leading server operating systems and enterprise email systems. The server software may be integrated with Microsoft Exchange email, IBM notes or any SMTP email programs. As well, fax server programs that support production faxing often support integration with SAP, Oracle and other enterprise resource planning and customer relationship management solutions. This is an area where the purchaser should be interested in the close relationships that some vendors have with key ERP players. Example: Esker has been a SAP partner for years. During installation, many fax servers support adding users directly and automatically from an email system or from other computerized logs of employees. This can save a great deal of time compared with individually adding each user manually.

Fax server software also handles the routing of inbound messages from the fax server, where the message is actually received, to the individual end user desktops that are operated by the intended recipients of the messages. Fax servers support this inbound routing capability through a number of mechanisms that work in various ways. First, there is direct-inward-dialing (DID), which works like a PBX with direct phone lines. The DID capability receives a wide range of numbers to a single phone trunk and it checks the last four digits against a routing table to determine where the phone call should be routed. This is the best form of inbound routing because it means the fax sender merely has to dial a phone number and the fax is automatically inbound routed. DID, however, may not be available for some older PBXs and it may be somewhat expensive relative to purchasing the DID phone numbers. DID (and ISDN, a similar routing technique used abroad) was used in 78% of all fax servers employing inbound routing in 2006. Other methods that may be used range from manual routing, where a human being routes each fax as it arrives (used 5% of the time), to optical character recognition (OCR; used 2.5% of the time), where the name of the intended recipient is machine-read off the fax cover sheet, to dual-tone-multifrequency (DTMF), which is where the fax sender must dial an extension number (used 11% of the time), to line routing, where a fax server has multiple fax lines and calls to each line are routed separately (used 7% of the time).

Each of these other methods has the possibility of flaws: manual routing has human error, OCR has machine mis-readings of recipient names, DTMF has the extra requirement on the sender of punching in the extension number at the right time, and line routing is limited to only as many intended recipients as you have fax lines. So, DID is a clear winner, but again it is not always available with certain older phone systems.

What To Consider When Purchasing A Fax Server

1. Does the server software integrate well with ERP programs from suppliers like SAP and Oracle?
2.  
3. Is the server software compatible with your email?
4. Is the server software compatible with your operating systems?
5.  
6. Does it supports mixed-mode Internet and conventional faxing?
7.  
8. Does the fax server provide rock-solid reliability?
9.  
10. Does the server software support the inbound routing technique that you want to use?
11.  
12. If your inbound routing choice is for DID, does the fax server support a DID fax boards?
13.  
14. Do the management capabilities allow you to easily determine whether a fax transmission has been successfully completed and does it provide reports that show the status of each fax transmission?
15.  
16. Is it easy to add users from your email system or other computerized log of employees?
17. Does the fax server support Internet faxing?
18.  
19. Is the client software easy to use?
20.  
21. Is there adequately featured web fax software?
22.  
23. Can sent faxes be automatically archived?
24.  
25. Can you send multiple, mixed file attachments?
26.  
27. Is receiving faxes simple and are there ways to automatically archive the files?

Internet Faxing

There are also conventional fax servers and IP fax servers. Conventional fax servers hook up to analog phone lines and use PSNT (public switched telephone network) to send and receive all fax calls. IP fax servers use the Internet to send all faxes and can receive all faxes via a gateway. Internet fax servers accounted for $44 million out of the $280 million total market for fax servers in 2006. They are forecast to gain primacy over conventional fax servers in 2009 and to grow at a 50.7% compound annual growth rate to $245 million in 2010.

In general, there are no major capability differences in a conventional and IP fax server. However, there is a difference in how they send a fax. A conventional fax server sends the fax over a conventional phone line, which involves a process called handshaking where the sending fax sends signals to the receiving machine to figure out how fast the transmission will take place, what compression method will be used, what error protection protocol will be used, etc. Then the call proceeds and when it ends, a confirmation (or an error report) is faxed back to the sending machine.

Internet fax transmissions goe over the Internet which creates a different environment from the PSTN. The Internet takes a call and puts pieces of each call into packets and sends them over different routes to the destination (a store-and-forward method of communication). With a fax call, this may mean sending a fax like an email so there is no handshake and the fax call does not receive a confirmation at the end of the session. Or else the fax call is sent in realtime (or almost real time) and a spoofing technique is used to fool the receiving fax machine that the call arrives in real time. This spoofing technique is key as a conventional fax call will fail at certain points during the handshake if a delay of just several milliseconds occurs. The receiving fax system must be fooled if a packet arrives out of order and is delayed. This delay factor has caused some concern among buyers that they won’t receive the same kind of performance from IP fax servers as from conventional fax servers.

The huge advantage of Internet fax servers are that they may be used without fax boards. This is accomplished with software-only Internet fax servers that use the microprocessors in Internet gateways and routers that corporations already have installed. Sales of these board-less systems amounted to more than three times the sales of Internet fax server sales that included fax boards. A second advantage to using FoIP (fax over IP) systems is that a company may eliminate any costs relating to using the public switched telephone network, including line charges and PBX ports. This is especially important to companies that have eliminated all their PSTN infrastructure relative to installing VoIP services. In the end, as time passes and vendors’ products pass the reliability tests, the fears about Internet fax servers will go away. Cantata Technology, the dominant fax board supplier, has brought out the Brooktrout SR140, a real-time fax-over-IP capability and many fax server vendors, including Esker, have supported the SR140 for over a year. As enterprises install the Esker version of the Internet fax server and see its reliable performance, sales will pick up steam. With so many enterprises moving to Internet voice, it is only a matter of time before the majority of fax server sales are for Internet fax servers. In the meantime, there is always the possibility of having a fax server support mixed conventional and Internet faxing.

Fax Boards

Fax boards are required with every conventional fax server. Fax boards handle the compression of images and they send and receive faxes. The great majority of fax board sales are for intelligent fax boards which have microprocessors on the boards that handle the very fastest of calculations that may cause fax transmissions to fail.

The first matter that a buyer must consider is what type of fax board to buy. Intelligent fax boards drive the highest completion percentages, but cost the most. These boards typically cost between $400 and $800 per port. So, for a 4-port fax server, a buyer can expect to pay as much as $3,200. For a 24-port server, a buyer is looking at an investment of about $14,000, for the fax boards alone. Buyers who are ready to take on the risks of using non-intelligent fax modems — including a lower percentage of fax calls that are completed and slower fax calls (due to slower handshaking, lack of bit stuffing, less efficient handshaking protocols) which translates directly to higher telephone bills — can acquire Class 1 and Class 2 fax modems that cost as little as $100 to $300 per port.

Most buyers decide to go with intelligent fax boards (in systems where fax devices are used, fax boards outsell fax modems by a ten to one margin), which gives an indication of how important a robust handshaking and call-completion capability is — and they end spending more than just the cost of the fax boards. Many intelligent fax board users also get an express exchange service, so if any of their fax boards fail, they can get a replacement within 24 hours. This adds about 15% to the cost of the fax boards.

A second option that fax board buyers have available is the capability to expand the number of ports just with a software key. This way, buyers do not need to go to a reseller to buy additional fax boards just to add a few ports. For instance, perhaps you want a 12-port fax board, and then when you begin to fax, you realize that you would like to have 16 ports. Generally speaking, the board that supports 12 ports can actually support up 24 ports. So, by getting a key from the manufacturer, buyers can expand the number of ports on their fax boards without going back to the reseller and buying a new board. This also costs more money, but less money than buying a new board and getting rid of the old one.

Fax Server Hidden Costs

Hidden costs are not just a matter of fax boards. A whole slew of hidden costs are involved with fax servers. These include costs for the following:

 

1. Servers — on which the fax boards and fax software reside; depending on whether you dedicate a server to the fax function, this can cost well over $1,000 or can cost just hundreds if a server is shared. On top of the server hardware, the software (operating system) and the cost of securing this hardware in case of mission-critical faxing (clustering, stocking of a spare fax board, etc.) must be considered.
2.  
3. PBX ports — to integrate fax server ports with PBX ports. These can cost hundreds of dollars apiece.
4.  
5. Pre-installation consulting time — planning for large installations. Figure that this can cost about $300 per hour and involve up to a couple of days.
6.  
7. Installation and configuration time — this is the time it takes to install the software on the server and the clients, the time to configure the software for each client,
8. and the time to integrate the software with an enterprise application, and test the results.
9.  
10. Per-administrator initial training time — the time to train network administrators to use and manage the fax server and then to train end users.
11.  
12. Initial training time — the time it takes to train each end user at the average labor cost for end users and the cost for the trainer.
13.  
14. DID one-time phone line installation charges — the setup of DID-enabled phone lines wherein, for example, there would be one phone line with 20 different phone numbers for 20 different users. Charges can be from about $0.50 per phone number to a $1.00 or more.
15.  
16. Monthly phone line fee — the flat monthly fee charged by telephone companies for a single line or single T1 channel. These fees can range from about $10 to $30 per month.
17.  
18. Monthly fees for DID numbers — also charged monthly by local telephone companies, the fees range from about $0.10 per month to about $0.30 per month per DID number.
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20. In-house support time — these are costs for administrator work for end-user help, patches, upgrades and system crashes.
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22. Vendor support and maintenance contracts — these contracts typically cost 15% of the initial cost of the fax server software per year.
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24. Cost of the up-front investment — these are the loan interest payments or the ‘opportunity cost’ of using cash to acquire fax server functionality instead of using it for some other purpose. Buyers should figure the cost at about 8% of total up-front purchase costs.
25.  
26. Space rental — this is the cost to rent the space occupied by fax server equipment.

 

Fax Services

Internet fax services offer all the same capabilities as fax servers — without the hidden costs and without any requirement for fax boards. Enterprise Internet fax services are expected to grow by 26.8% compound annual growth rate to $440 million in 2010. Individual Internet fax services are expected to grow at 24.4% compound annual growth rate to $670 million in 2010. With these services, businesses get the ability to send and receive faxes, the capability to manage their fax activity and, at least with Esker service, the ability to integrate fax with their enterprise applications. Esker also offers the ability to send documents via postal mail.

 

With a service, buyers have low up-front investment and gain the option of flexible costs depending on how much traffic volume they have. No software need be installed, since all operations take place off web interface. The one difference with services is that they offer virtually unlimited capacity, so if an enterprise has one mammoth fax job, it can be easily handled. Conversely, if the enterprise were using a fax server, it would be constrained by the number of fax lines it had installed. It does not make sense to acquire more fax boards to handle just an occasional fax job, but if a company uses an Internet fax service, the capacity is there to handle every job. Another important aspect of fax services is the pay-as-you-go pricing model. The per-fax cost does not vary with the volume, as is the case with a fax server, because of the fixed cost of the fax infrastructure.

Does the service provide your company with all the functionality your business needs and does it provide rock-solid reliability? Does it integrate well with any enterprise or desktop as that you use? Is it possible to automatically archive each sent and received fax? Is the pricing easy to understand and is it acceptable in terms of its total cost? If you find acceptable answers to these questions, then perhaps a fax service will suit your business.

What To Consider When Choosing A Fax Service

1. Does it integrate well with desktop and enterprise applications that you use?
2.  
3. Does it provide management capabilities to allow your company to easily add and change users?
4.  
5. Is the pricing easy to understand?
6.  
7. Is the fax service easy to use?
8.  
9. Does it provide all the functionality you need?
10.  
11. Does it provide rock-solid reliability?
12.  
13. Does it eliminate the need for in-house support?
14.  
15. Is it possible to automatically archive each sent and received fax?
16.  
17. Can you generate reports to determine the final status of all fax transmissions?
18. Are there no hidden costs?

 

So Fax Server or Fax Service? If your customers and vendors expect faxes I guess you have to play the fax game. But with email and pdf…why?.