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Greg Osterdyk (left) and Brent Lothrop of The Fax Guys on May 24, 2012 in their Burnsville office at 11975 Portland Avenue, Suite 110.

Joel Koyama, Star Tribune

Faxes aren't fading to black

  • Article by: STEVE ALEXANDER
  • Star Tribune
  • June 4, 2012 - 1:24 PM

In the age of e-mail, you'd think that faxing was dead.

But you'd be wrong. Fueled by a belief that fax is easier to use and harder to tamper with than e-mail, faxes (short for facsimiles) are more widely used than ever.

"Fax is the only guaranteed way to transmit something electronically," said Brent Lothrop, president of The Fax Guys, a Burnsville reseller of Canadian-made RightFax software whose corporate customers include Medtronic of Fridley and U.S. Bancorp of Minneapolis. "That's why it's widely used to move documents in health care, where there are federal privacy rules."

Consider the fax's popularity: Medtronic says it sends and receives 20,000 faxes a day. U.S. Bancorp says it handles about 2 million fax pages a month. Thanks to steady annual growth of 15 percent or more, the worldwide fax market is projected to be nearly $2 billion this year, says Michigan-based Davidson Consulting.

Part of the love affair with faxing is that everybody understands how to use it, said Greg Osterdyk, chief technology officer of The Fax Guys. "Fax is easier and more reliable than e-mail, and it's ubiquitous -- everybody knows what a fax machine is."

Another reason for the longevity of fax is that it's kept up with the times. Stand-alone fax machines are still common, but modern ones also double as printers and copiers. And in the corporate world, fax machines have given way to fax servers that deliver faxes electronically to individual PCs, just as e-mail servers do. The process, called "fax over IP" (Internet protocol) transmits faxes to PCs as picture files.

"People have been predicting the end of the fax for more than 10 years," said Dan Natale, a senior system administrator at Medtronic, where faxing is used for everything from privacy- protected medical information to requests for bids. "But fax is growing, not just hanging on. The cost is low, it's easy to set up and it works. You could set up a secure e-mail system instead, but it would be very expensive."

"It looks like fax will be here for the long run," said Andy Waterous, assistant vice president for enterprise content management infrastructure at U.S. Bancorp in Richfield. "We've steadily expanded our fax volume, and every line of business has a different reason."

Beneath their shiny new surfaces, fax machines still work the same way. A fax machine, or server, uses a conventional telephone line to call another fax machine or server. The connection established, a digital fax image is converted to analog so it can travel over the phone line, then converted back to digital on the other end for printing or viewing.

From this simplicity comes several benefits.

Because fax works over conventional phone lines, which use a dedicated connection between two points, it's far harder for a hacker to intercept than an e-mail, which passes through many Internet servers on the way to its destination, Osterdyk says.

Because a fax is transmitted as a picture, it can't be altered. That makes it ideal for sending signed documents, such as medical prescriptions, he said.

A fax machine or fax server automatically gets confirmation that a message it sent was received, and at what time. That's important in the financial world, particularly on Wall Street where it's important to know the exact time an order to buy or sell a stock was received, Lothrop said. E-mail doesn't give confirmation of delivery unless both sender and recipient use the same special software.

Of course, there's one downside to sending a fax: It isn't free like some e-mail. Lothrop said The Fax Guys charge a $20,000 one-time software license fee and a recurring $4,000 annual software maintenance fee for a fax server that can handle as many as 4,000 fax pages during an eight-hour day. But The Fax Guys say the cost amounts to pennies per message.

"With the time you save using server-based fax software run from a desktop PC, you get a return on investment in about three months," Lothrop said.

Until last year, The Fax Guys firm was called Dynamic Solutions Group, which it had been since it was started in 1998 by Osterdyk and Lothrop, both 40, and two other partners who were later bought out. In addition to its Burnsville headquarters, the 12-employee firm has workers based in Arizona and North Carolina. The privately owned firm had $5.2 million in sales last year, the two founders say.

They are philosophical about the fact that most people think they must be going out of business.

"If I had a nickel for everybody who told me that fax was going away, I'd never have to sell another fax server," Lothrop said. "I think there's reason to believe that the fax business has legs for another five to 10 years."

Steve Alexander • 612-673-4553

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