Faxes are evolving

Karen Prema -- Purchasing, 3/16/2006

The market for fax machines is dropping due to increased use of both multifunctional products (MFPs) and e-mail attachments in place of faxes. But there are still strong arguments for use of stand-alone fax machines in many companies and fax manufacturers continue to push the technology envelope.

According to David Haueter, principal research analyst for Gartner in Stamford, Conn., the number of stand-alone fax units sold will drop 12% annually through 2009. There are two primary reasons for that drop: More buyers are looking into MFPs instead of stand-alone faxes and increased use of e-mail attachments and instant messaging is reducing the number of faxes sent.

But if you think fax is dead, think again.

"We don't see fax machines going away anywhere in the near future, but they're going to continue to decline and remain a feature that is used in certain businesses," says Haueter.

There are still instances where hard copy documents need to be sent, signed and sent back. And many users still prefer to send a fax rather than scanning it as a PDF and attaching it to an e-mail. More fax machines are offering the ability to send to e-mail. Users can send the document through the fax machine, type in the e-mail address, hit send and it sends to the e-mail address.

Fax machine manufacturers continue to invest in new technology and functionality to improve fax technology such as networking capability, print speed improvements and increased resolution.

Selling job needed. Of course, they have some selling to do, as the experience at First Horizon National Corp. shows. The company is installing Panasonic MFPs and networking them across its 800 locations throughout 40 states. As a result of MFP growth, stand-alone fax technology is being phased out at the financial services provider. Tom Baker, vice president and CPO for First Horizon says that although fax machines are very inexpensive compared to MFP, procurement would purchase an MFP over a stand-alone fax machine if it's looking to buy fax technology.

A supplier educated Baker's team about the benefits of using MFP, and procurement conducted a study on the advantages of MFPs vs. fax. Once convinced, First Horizon negotiated a contract with Panasonic to centralize its equipment spend on MFPs.

Today, the company is sending documents through e-mail, as opposed to faxes. "That way, we have less paper to handle, says Baker, "and every piece of paper produced and handled creates a cost." Procurement also saves money because it doesn't have to pay for additional phone line charges. From a fax standpoint, Joe Stamps, strategic procurement manager, says, "Our greatest savings has been the scan to e-mail technology."

The biggest challenge in transitioning to scan to e-mail is achieving user acceptance. Also, users expressed concern about security and convenience, says Stamps.

Fax vs. scan to e-mail. But, many institutions will not accept an e-mail as a legal document because they believe it's not secure, says Bob Curci, senior product specialist for Panasonic's fax, copier and MFP lines. For instance, if the document is sent by e-mail it can be intercepted. On the other hand, faxed documents can only be intercepted by the end user receiving the fax.

In some cases stand-alone fax is more secure than a fax networked onto an MFP. Some of Panasonic's customers were concerned they were losing faxes and couldn't keep track of when faxes were going out or coming in.

Another advantage of stand-alone fax vs. MFPs is that it doesn't tie up a machine that another user might want for a different function (scanning, copying, etc.). They are also inexpensive so more can be distributed around the building and still feature the same functions.

New fax improvements. Panasonic created an auto archiving capability on its fax machines, which were in high demand for many companies. When a fax is sent, a copy in a PDF format is sent to a predetermined e-mail account so the document can be archived. This way, users are guaranteed that the document won't go through unless an archive is accessible.

This past year, Panasonic added network user authentication. In the past, users identified themselves through a numeric value and today they identify themselves through a network log-in and password.

Curci says that output quality of fax machines has improved. Panasonic has gone from fax machines that were barely capable of outputting 200 dots per inch (DPI) resolution to machines printing at 600 DPI. This improvement was made possible by new technology in production scanners.

"We took the technology that goes into production scanners and incorporated it into the scanning mechanisms of our fax machines," says Curci.