Fax over IP - Technology Information

Communications News, March, 1999 by Lenny Liebmann

What's it worth?

Things change so fast in this industry that you have to be careful not to blink. Take fax over IP. It wasn't that long ago that fax service providers were boasting about how much money they could save you by delivering your fax over the Internet. The idea was that--by doing most of the transport over the 'Net and then passing the fax off to the local PSTN at one of their POPs--they could cut the end-to-end cost of transmissions by over 60% for overseas calls and about 30% for domestic ones. Wrong.

First of all, long-distance rates have plummeted significantly. So--while five cents per minute may have been a hot deal two years ago--it's only a 15% savings over the six cents per minute corporate buyers can get today. Secondly, local and in-country charges can be quite exorbitant. In fact, the cost of completing a call from a POPin Germany to a city on the other side of the country can be higher than a regular point-to-point international long-distance call from the States. These two factors don't make selling IP fax services a very profitable proposition.

But wait, there's still value to be had in using IPnetworks for fax services. Remember that the most compelling aspect of computer-based faxing has nothing to do with transport--it has to do with process automation. When you, automate the transmission of a fax, you eliminate the entire process of someone printing out a document, walking it to a fax machine, discussing constitutional law with Connie in accounting, and then walking back to his or her desk. That lost productivity amounts to 30-40 cents a minute--dwarfing the cost of the call itself.

That's why some IP-based fax service providers are getting smart and pitching their offerings as alternatives to the fax server as we understand it today, rather than focusing on cheaper transport. The idea is that, if you simply route your faxes through the `Net pipe you already have in place, you can eliminate the hassle and expense of all those phone lines, fax boards, and CPU administration that goes with running your own fax server. You also gain a highly scalable solution that requires almost no additional staff resources, regardless of how high your faxing volume climbs.

And don't think it won't climb. Despite the growth of email, fax is still a highly attractive medium for a wide range of communications requirements. No one worries about file formats when they send a fax. And if I'm sending you a contract, I don't want you to be able to edit it in Word. The time/date stamp on a fax also makes it a legally admissible, nonrepudiable document.

Of course, you can also use e-mail to send a document as an image, rather than as an editable document. This is the approach used by most so-called "IP-enabled" fax machines. They work by implementing the ITUT.37, which provides for the conversion of fax transmission signals to SMTP mail messages with MIME-compliant TIFF file attachments. This type of technology hasn't really caught on yet, but it may become more attractive as organizations realize that people are completely habituated to their fax machines--and that one way to divert some of that traffic over the IP network is to use some sort of e-mailing approach.

The main thing to keep in mind is that simply diverting fax over an IP network is not a major victory (except, of course, for the ISPs). The real economic synergies between the data network and fax communications have more to do with applications like customer service and marketing than they do with the incremental cost savings that can be gained through convergence. That's where your fax server can distinguish itself--by acting as an integration engine that links information sitting in documents and databases to potential recipients in the outside world.

So do the math carefully before you buy into any hype about the fax-over-IP as a big money-saver. Anomalies in intra-LATA call pricing can actually make it even more expensive to use your own corporate WAN as a Least Cost Routing tool for faxes than simply getting the best deal from a conventional carrier. There are plenty of people in IT who don't realize this and need you to educate them before they invest a lot of time and money in an LCR "solution" that's really just an exercise in futility.

But, at the same time, look for ways that you can better integrate fax with your key customer-facing applications. Businesses exist to make money, not to just save it. Improving communications with the marketplace and boosting the productivity of costly knowledge workers will almost always pay more dividends than just trimming an operational cost by a few points.