Just the IP fax, ma'am

By Tim Greene
Network World, 7/6/98

Using the Internet instead of the public phone grid to deliver facsimiles can take a big bite out of long-distance fax bills, offering huge savings that corporate IS managers are just starting to recognize.

Deploying an IP fax service can save 30% to 70% on international fax calls, depending on what country the fax goes to, experts say. And international faxing within a corporation becomes virtually free if customers buy their own Internet fax gear and the offices involved already have Internet connections.

While domestic savings are lower, some IP-based fax products can be configured to use least-cost routing to take advantage of low evening telephone rates as well as IP networking. And IP faxing can pave the way for services such as fax-to-e-mail and e-mail-to-fax conversions.

Fax over the Internet is gaining so much attention that by 2004 it is projected to account for 28% of all fax traffic. But for now, Internet faxing barely exists statistically, accounting for only 22 million pages of the 369 billion pages sent last year, according to fax analyst Maury Kaufman of The Kaufman Group.

TPI Aviation, Ltd. in Dallas uses IP faxing, but the company came upon it almost accidentally when it realized its long-distance phone bills were skyrocketing. An analysis showed a major portion of the cost was for faxing price quotes to the company's international customers.

At about the same time, TPI heard about PSINet's Internet Paper IP fax service and signed up. Now, for a flat monthly fee, the company buys a block of faxing time from PSINet. The company has yet to exceed the limit, according to Corie Austin, TPI's network administrator.

The cost savings are significant, Austin said, but she wouldn't say exactly how much TPI is saving.

Fortune 500 and mid-size companies spend an average of $15 million per year on fax phone bills, according to a survey by The Gallup Organization funded by fax equipment maker Pitney Bowes, Inc.

How it works

With PSINet's service, users load fax server software on a Windows NT server and connect it to PSINet's backbone. When a fax is transmitted, a network server looks up the IP address of the PSINet node closest to the destination fax, routes the fax accordingly and then delivers it over the public switched network. The customer gets a confirmation when the fax is received.

Some service providers charge 15 cents per page within the U.S., making it unattractive for corporations paying 6 cents per minute for long-distance calls. But prices are more attractive internationally. For example, FaxSav, Inc. charges 30 cents to fax a page to Australia and 35 cents to Germany, less than the per-minute charge to either country.

You don't have to use service providers, of course. You can roll your own by installing Internet fax servers at each site.

That's becoming increasingly popular, according to suppliers of Internet fax gear. Jim Jonez, vice president of marketing for RightFax, Inc. in Phoenix, said business is increasing 100% per year.

The fax server model has other benefits, according to Rudolph Martin, owner of Bear Analytics, Inc., a financial research firm in Burlington, Mass. Bear uses an Internet fax server to distribute surveys, allowing the company to multicast forms quickly in a format respondents like.

"My alternative was to have a lot of bodies running to a fax machine. It was labor-intensive," Martin said.

Traffic reporting done by the server helps him track which surveys have been returned and which are outstanding.

While you might think fax traffic would be declining as e-mail takes off, both are increasing in popularity, according to Peter Davidson, an analyst for International Data Corp. Many businesses around the world do not have e-mail, and fax is the only alternative, he said.

With the growing popularity of IP fax, Davidson said he expects major carriers such as AT&T, MCI Communications Corp. and Sprint Corp. to enter the IP fax market in the next few years, just before the market booms.