Is fax really growing?:
My background is real-time communications (voip, video, messaging) so this was not intuitive for me. eFax's latest quarterly report indicates they grew their fax division by 5%; the hospitals many of our partners server have growth at 15-20% in terms of revenue and usage. In fact, our partners tell us this past year was their best in the past 20 both in terms of revenue and usage. Anecdotally, one hospital network we just talked to does it in house and is increasing the number of phone lines to their servers from 64 to 144. But the real source for this number is from Davidson Consulting's annual fax report: http://davidsonconsultinginc.com. Relevant summary is at https://www.biscom.com/blog/fax-server-industry-news-from-da.... They cite 9.4% growth; our number comes from our focus on healthcare where we source from our partners' growth, as well.
Who are the Customers/Market Size:
We are focusing on healthcare because they have strong incentive to send data faster, but key segments also include legal, government, insurance, and finance/banks. The main driver for them is compliance (HIPAA, Sarbanes-Oxley, FINRA regulations, etc) that effectively require companies to secure their communications and keep an audit trail of access/communications. Audit trail and interoperability are the main reasons companies keep fax around because it's a least common denominator when it comes to communications. The entire secure document collaboration market (including SharePoint and Dropbox) is around US$11.5B right now; the fax market is $5B of that. Telephone costs are $1.3B of that.
Why are these customers left behind:
1: It's hard to completely change out a huge system that is transmitting millions of pages of data every day and many secure document products like DocuSign aren't designed to send at scale like some of the banks use (eg, one bank does 40M pages/month).
2: Beyond the phone number system, there's no universal registrar for contact information for each company. So if company A wants to send something to company B, and both are highly regulated, if company A uses Dropbox and company B uses SharePoint for their audit trail, then how do the two talk to each other? Fax is universal and has a well-known protocol/lookup system and it keeps their audit trail in one place. It's just old, slow, and expensive (but cheaper than building custom integrations between every sender and receiver). I'll bet most people have experience receiving secure documents or signing with at least 10 different systems. If you had to receive more than 1000 documents a month, it would be really hard to do that with 10 different systems: You'd want to just use one, especially for record keeping.
Who are the Customers/Market Size: We are focusing on healthcare because they have strong incentive to send data faster, but key segments also include legal, government, insurance, and finance/banks. The main driver for them is compliance (HIPAA, Sarbanes-Oxley, FINRA regulations, etc) that effectively require companies to secure their communications and keep an audit trail of access/communications. Audit trail and interoperability are the main reasons companies keep fax around because it's a least common denominator when it comes to communications. The entire secure document collaboration market (including SharePoint and Dropbox) is around US$11.5B right now; the fax market is $5B of that. Telephone costs are $1.3B of that.
Why are these customers left behind: 1: It's hard to completely change out a huge system that is transmitting millions of pages of data every day and many secure document products like DocuSign aren't designed to send at scale like some of the banks use (eg, one bank does 40M pages/month).
2: Beyond the phone number system, there's no universal registrar for contact information for each company. So if company A wants to send something to company B, and both are highly regulated, if company A uses Dropbox and company B uses SharePoint for their audit trail, then how do the two talk to each other? Fax is universal and has a well-known protocol/lookup system and it keeps their audit trail in one place. It's just old, slow, and expensive (but cheaper than building custom integrations between every sender and receiver). I'll bet most people have experience receiving secure documents or signing with at least 10 different systems. If you had to receive more than 1000 documents a month, it would be really hard to do that with 10 different systems: You'd want to just use one, especially for record keeping.