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Legacy fax lives another day

by Sara White

Surprisingly, the redoubtable fax is not yet redundant and appears to be enduring in the face of email supremacy. This is, in great part, because of its legal standing and the simplicity of the technology, meaning that the familiar buzz of the fax is still echoing through offices.

Although sales are down by more than a fifth in unit sales in 2008, conversely consumable sales are holding up well, illustrating that fax usage is still prevailing. There are sharp declines in thermal fax sales, traditionally the domain of the home user, while demand for laser faxes is stronger, with standalone faxes holding their own in the face of increased competition from multifunctional devices with quad functionality, including fax. At the same time, the market is changing as demand for internet fax services grows, even in these testing times.

Reflecting the market, understandably manufacturers are focusing on selling a limited number of standalone fax products, tweaking existing machines rather than rolling out many new models.  At the same time the market has contracted with vendors withdrawing from the market. There are exceptions and a number of new models have been launched this year, including inkjet fax machines from Canon and Olivetti, and several entry-level thermal faxes under Sagem's Philips brand, all featured in the data charts accompanying this report.

While thermal faxes are compact and cheap, the downside is the life of the paper transmission, with its tendency to ink-fade. As a result, laser and inkjet faxes tend to dominate business sales particularly as prices have dropped.

The price of laser has come down and we are seeing a migration to laser faxes. It is an interesting dynamic within the market

Of course, with budgets under pressure, it could be time to reconsider whether you need a standalone fax machine with its relatively high running costs, including initial hardware, dedicated telephone line, consumable costs and 24/7 energy consumption. On the plus side, a dedicated fax is easy to use with simple technology, document feeders for long documents, andis legally compliant.

Buying advice

Before making a final decision on the best type of fax for your business - standalone, multifunctional or an internet fax service - there are a number of questions to ask:

• how many faxes do you send/receive per day/week;
• do you need fax services in all departments, or could you reduce fax services to specific areas such as order processing/accounts and sales;
• are your business processes, such as product ordering, dependent on signed fax orders, or could you move to an electronic ordering system;
• what are you paying for your dedicated fax phone line (s) and how many dedicated fax lines do you have?
• have you considered an internet fax service - if so, do you have the necessary scanning equipment to scan the initial document before it is faxed;
  
• if you want to reduce hardware costs, consider a multifunctional device with fax capability on the network, but bear in mind that fax tends to be an option on MFDs so factor in the additional charge.

There is still demand for fax in certain segments, particularly healthcare, legal and financial services.

Sagem general manager Jeff Root said: "The retail sector and home use have dropped off by about 20% in the last six months, but consumables have not dropped off so we will be staying in this market. The Philips brand is on the thermal transfer faxes and they are sold into the likes of Comet and Argos, and it is still worth being in the sector."

Cost benefits of multifunctional faxes

While thermal fax is in terminal decline, demand for laser fax is holding up. This is certainly the case at Brother, which is keeping a close eye on the market and although the company has no plans to launch new devices, it will concentrate on improving existing laser products.

If people have the option to buy a multifunctional with a fax for an extra £30 or £40, it makes sense. You can't buy a laser fax for that price Brother general manager sales Terry Caulfield said: "In the standalone fax market, thermal ink has declined, but the laser market is showing signs of increasing. The price of laser has come down and we are seeing a migration to laser faxes. It is an interesting dynamic within the market."

"There is also a shift to multifunctional machines. If people have the option to buy a multifunctional with a fax for an extra £30 or £40, then it makes sense. You can't buy a laser fax for that price. That is where the smart buyers can see the added value - if they want to buy a standalone fax, but need a print and scan application, a multifunctional makes financial sense.

"Customers have been able to reduce costs by moving to multifunctional internet faxes. If you can hook these machines up to the network, there are substantial cost savings."

Changing business processes

The simplicity of fax technology and its legal status are its strongest selling points; this goes a long way to explaining ongoing demand for fax machines.

"Fax is not very fashionable in the days of Twittering and all the other new technologies, but it is a business tool and it does a good job," explained Caulfied. "Faxes can be archived and put back into the digital world quite easily. You see a lot of fax use in central government agencies and local government - it is all about their processes and they see fax as an important tool.

"The death of the fax machine has been overstated. Fax is in decline, but the key thing about fax is that it has a legal status. The legal status of an email is slightly less defined - if you need a signature on a piece of paper, this is where a fax comes in to its own. We see that a lot in small businesses where a signature is needed on a purchase order and in legal, banking and logistics companies - there are whole areas of business that are still using fax."

While email is the dominant communication tool, the volume of paper in the workplace is certainly not in decline.

Root said: "Until there is a paperless office, which isn't going to be anytime soon, and until emails are contractual, binding agreements, which has not happened yet, there will still be demand for faxes. Faxes are a legal document and that is why they are still used so much. Fax use will decline, but it is still an important method of communication."

The death of the fax machine has been overstated. Fax is in decline, but the key thing about fax is that it has a legal status

Sagem's largest fax contracts are in the public sector, particularly the healthcare sector. Faxes are used widely in NHS hospitals and pharmacies - an easy, quick way to transmit prescriptions, where a signature is required.  

"Although people are using PCs and handhelds in hospitals, they can actually scribble down what they need quickly and fax it straight to the pharmacy; in these cases, faxing  is normally used for internal use," said Root.

"In the insurance market, demand is still high - brokers and intermediaries need to use faxes for legal reasons. Signed contracts and agreements have to be faxed."

For Muratec, there is a clear shift towards multifunctional devices, with fax as standard on all its devices. However, with ongoing demand from customers in banking and financial institutions, Muratec has upgraded its high-end standalone fax, the F305, adding networking to the standard specification.

Muratec technical manager Richard Stephens said: "Although some clients are moving to electronic fax and demand is down, fax usage is still big for ordering. We have moved away from the low end to concentrate on LED [laser equivalent] fax machines. As long as fax is regarded as evidence in a court of law, there will be demand."

Market trends

As with all sectors of the IT hardware market, unit sales are down, purchases are being delayed and leasing companies are loathe to finance acquisitions - this is having knock-on effects across the board.

Root said: "We are seeing an extended lifecycle - instead of upgrading machines every two or three years, companies are holding on to existing equipment. On higher end purchases, it is difficult to get leasing deals and this is particularly true on high-end purchases like fax servers which cost £20,000+ - that is where we have noticed a big cut back."

What's new?

Wireless faxes are coming to market, while Sagem has launched a GSM fax in Germany and is trialling the technology here. Users can insert a SIM card into the fax and transmit faxes over a mobile network without using a fixed landline.  The company is talking to mobile operators, including Vodafone and T-Mobile, about selling the machines in the UK and they are likely to retail for around £160.

The Sagem GSM Phonefax 43S transmits a fax through the SIM card and does not need a phone line. You still need power, but the application can be used anywhere, for example, on a boat or in a site office in a Portakabin. The market for the GSM fax tends to be construction and the events market, where people are running temporary offices and do not want the cost of setting up a fixed phone line but need access to faxes.

While we think of faxes as single function machines, there are a number of useful features on the latest models with SMS texting, QWERTY keyboards and a range of connections, including SIP, which can hook into the company network, bypassing phone lines and slashing the cost of faxing, particularly if you send high volumes of international faxes.

Business fax: what you need

* Modem speed: look for the fastest modem available, ideally Super G3 33.6kbps modem with up to 3 second transmission speed, equivalent to around 15 pages per minute

* Fax memory: check page capacity to make sure you have enough memory to store inbound faxes when paper runs out

* Automatic document feeder: check capacity, this ranges from entry-level models with limited capacity for 10 sheets to heavy duty faxes with 150-sheet ADFs

* Document size: do you need A4 or A3 capability?

* Print type: laser, inkjet or thermal * Consumables: check yield of cartridges and cost per page

* Speed dials: check the number of one-touch and coded speed dials, the more the better to improve productivity levels

* Input/control panel: ease of use, functionality, numeric keypad or QWERTY keyboard

* Energy saving features: is there standby energy consumption feature or does fax use operating levels of energy 24/7? Lots of older technology out there so check this out

Internet fax services

If you do not want a standalone fax or multifunctional device with fax capability, there is a third way - an internet fax service such as MyFax or eFax.

Essentially, these hosted fax services are classic Software as a Service (SaaS) with a monthly subscription - fax customers are allocated a fax number which to all intents and purposes acts as a conventional fax, but instead of receiving and transmitting faxes over a phone line, the fax is sent and received by email as a PDF attachment.

MyFax allows users to send and receive faxes using an email account, removing the need for a dedicated phone line and fax machine. The service integrates with Microsoft Office, IBM Lotus Notes and ACT!, enabling users to manage their fax communication and document management workflow easily and at a lower cost than traditional fax servers or fax machines, regardless of physical location.

In these hyper mobile days, the biggest advantage of internet faxing is that you can pick up faxes wherever you are in the world as long as you have access to the internet and your email account. This is certainly not the case with the old analogue approach.

MyFax product manager Luc Vezina said: "For information workers, there is still a need to send faxes and we are focusing on small businesses that cannot afford a fax server, but want to use internet faxing. We are SaaS and we provide the ability to send and receive faxes via email. The number one cost of having a fax machine is the dedicated line which is very expensive; then there is the cost of paper and toner. For £5 a month you are looking at about a third of the cost for MyFax versus a standalone fax. The most popular plan [£5pcm] lets you send 100 fax pages and receive 200 fax pages a month, for £10 you can send 200 and receive 200 faxes a month."

So far the sector has been fairly resilient to recession and MyFax is growing with 15,000 new subscribers signing up each month. "As the customer base gets into the 100s of 1000s we do see a larger level of churn and it is something we watch closely, but we are offering our customers a competitive prices and a level of service that will address this. With our focus on small business, we see our service as counter-recessionary - when people are laid off they often set up their own businesses and we are seeing growth in this area."

At the same time, MyFax is running a cashback promotion for larger customers looking to replace prohibitively expensive fax servers, offering a 20% cashback on an annual subscription. The migration from fax servers to MyFax enables users to send and receive faxes via email and retain existing fax numbers, while the hardware, backup facilities and software are handled by MyFax.

The MyFax data centres are based in Canada and are covered by Canadian privacy law, which is compatible with EU legislation, stresses Vezina. "As a company we go to great lengths to make sure the data is secure. Faxes can be archived for up to one year or it can be set to zero so that as soon as the fax is transmitted the data is destroyed."

"Faxes can be archived for up to one year or set to zero so that as soon as the fax is transmitted the data is destroyed," said Luc Vezina, MyFax

Choosing an internet fax service

There are a number of internet fax providers and as with any SaaS or Cloud service, it pays to check out the small print and ensure that you are receiving the level of service and document security you would expect in-house. As soon as a fax is transmitted via an internet fax service, it moves to an off-site hosted server before transmission.

Before signing a contract, it is important to find out exactly what you are signing up to. These are the important questions you should be asking:

Check the upfront costs, including  joining fees, the monthly cost of the subscription service and minimum contract length;

• transmission costs, including number of free faxes per month, and national and international rates;
• cost of receiving inbound faxes;
• charges for spam faxes and what anti-spam tools are available to prevent spam faxes;
• is the fax transmission encrypted;
• security of data - how long is the fax stored for and where is the data centre based, is it covered by UK data protection laws, and if it is outside of UK/EU jurisdiction, where is the data held?

It might be old technology, but fax is responding to the changing times and proving that it still has a surprisingly important role to play in today's rapidly changing office landscape.

Contact file

Fax machines
Brother
http://www.brother.co.uk/
Canon
http://www.canon.co.uk/
Infotec
http://www.infotec-international.com/
Muratec
http://www.muratec-europe.co.uk/
OKI
http://www.olivetti.co.uk/Site/Public/product.asp?sid=&cid=231
Olivetti
http://www.olivetti.co.uk/
Panasonic
http://www.panasonic.co.uk/
Philips
http://www.fax.philips.com/index.php?id=217
Ricoh
http://www.ricoh.co.uk/
Sagem/Philips
http://www.sagem.com/
Sharp
www.sharp.co.uk/page/guidefax
Samsung
www.samsung.com/uk/

Internet fax services
eFax
http://www.efax.co.uk/
MyFax
http://www.myfax.com/?region=en-uk