I’m often asked about the cost structure of a fax solution in an enterprise environment. It’s a surprisingly convoluted discussion. For what has been such a simple and straightforward technology, today’s fax environments can be highly complex because of interconnected back end systems, cloud components, application integrations, automation agents and workflows, experienced system administrators, and several other factors. Each customer has different needs of course but I’ll try to break down the options so you can develop your own unique cost structure.
Comparing Analog Fax to Digital Delivery and Cloud
Many companies today still use in whole or in part, plain old fax machines with analog phone lines. It’s not uncommon to find a mix of fax solutions and companies often have little visibility of their fax traffic or the ability to centrally manage their fax solutions. To handle larger fax volumes, integrate with applications, and get better insight into their faxing, companies can implement enterprise fax servers or subscribe to cloud fax services. The move from analog to digital has several advantages, but one we hear often from customers is finally understanding their fax traffic, which can be quite a bit higher than their early guesstimates. From time to time, companies look to move to a new system because of issues with their existing solution, need for more scale, corporate mandates, new applications that need to be supported, or consolidation of different systems after a merger or acquisition. In today’s environment, COVID-related changes in the workplace have also increased demand for solutions that support remote work. Without fail, a cost discussion ensues, and fax pricing can feel very much like comparing apples and oranges. I would remiss to mention that while clearly important, price is only one metric that is often over-used when comparing solutions – paying a few pennies more or less per page can come with drastically different implementations.
Standalone vs. On-premises vs. Cloud Fax
Standalone fax machines and multi-function devices are what most people think about when they hear fax. While straightforward, this is typically the most costly and provides the least visibility in usage and costs. Analog phone lines, and consumables like toner and paper, can cause costs to add up quickly, not to mention the time spent printing out documents, walking to a device, and waiting for the fax machine to scan and transmit. But the appeal of fax machines is their simplicity, especially for low volumes.
Server-based systems are typically on-premises, and need a telephony partner or carrier. The back end telephony is usually the responsibility of the customer – and telephony costs are usually based on time off hook – a typical fax page takes 30-60 seconds to transmit depending on the complexity of the page. Cloud fax eliminates the telephony costs and management need, as well as back end server management and upgrades, and typically charges based on the number of pages sent or received. In our experience, connecting and integrating with carriers and/or VoIP systems are the main source of support issues, although once the connection is completed, it usually doesn’t rear its head again.
Customers with on-premises servers and their own back end telephony typically pay for the server software, application integrations, and licenses for users, with an up-front cost for hardware, operating systems, databases, other supporting software, and licenses, along with annual support and maintenance fees. Cloud fax customers typically pay a monthly service fee, pay by users and fax traffic, but have limited up-front costs. There may be a fixed cost component but the majority of costs for high fax volume users will be in pages sent and received, where support and maintenance fees are rolled into that price per page.
To compute the costs of an on-premises system vs. a cloud solution, let’s break out the various costs.
Standalone fax machines and MFDs are common in many office settings. The main downsides are the lack of visibility and management by IT, consumables like toner and paper, provisioning of analog phone lines (which is getting harder by the day), and the time spent printing documents, walking to the fax machine, and waiting for a fax to transmit can add up. Faxing anything over 20 pages becomes quite a chore, and paper jams can add to the frustration. For organizations that fax sensitive data can find confidential information sitting on a fax machine waiting to be picked up – in healthcare organizations, that can trigger a HIPAA violation.
Before cloud options existed, most high volume or mission critical faxing relied on server-based hardware and software located on-site or in a company’s data center. Because of the centralized server, companies had significantly better insight into usage and fax traffic, the ability to fax-enable every desktop, and support for integrations with applications for automation and workflows. Capacity is always a concern, and companies need to buy a big enough system to handle their peak traffic – because of seasonality or regular spikes in usage, most companies buy excess capacity that sits idle most of the time. Regular training for IT teams to support implementations, as well integration specialists, can be time consuming and costly, especially as people come and go.
Cloud fax, like other cloud services, lets companies focus on their core business and not worry about upkeep and maintenance. With a usage-based model, all the maintenance, upgrades, and technical support are rolled into a single price per page. You only pay for what you use, and if you’re not satisfied with your vendor, you can easily move to another without worrying about sunk capital costs.
While many calculate a price per page for on-prem solutions based on telephony fees alone, which can inaccurately predict true costs, people often forget to add in the hard and soft costs of additional personnel and administrators, scheduled and unscheduled downtime, hardware and software licensing costs, and training costs. Some even factor in the cost of electricity – whatever the case, make sure you’re calculating your costs correctly when trying to do a per-page price comparison.
Faxing is very different for companies – some faxes are not time sensitive, or volumes are low, or cyclical. Most cloud providers will be able to handle these. For high volume or mission critical fax needs, such as those in healthcare, financial services, and industries where regulation or customers demand reliability, scalability, and high deliverability rates, enterprise-level solutions and reputable providers are a necessity. For highly variable faxing needs, cloud shines – you have practically unlimited capacity for inbound calls, so no busy signals, and for those times you need to blast out a fax to a large number of people, some cloud vendors can absorb that traffic easily. For periods of low usage, you’re not paying for capacity that sits idle.
How to Get the Best Fax Price
For on-premises solutions, running on VMs reduces your physical footprint, with reductions in maintenance, backups, and associated running costs. One tip is to have VM snapshots that you can fire up if a server goes down. The more analog lines you can migrate over to the fax server can result in substantial savings. A hybrid system of server and cloud can allow you to reduce your system sizing – so instead of buying for the worst case scenario, you’re buying for your average fax traffic, and for those times where you need extra capacity, you can redirect to the cloud. But be sure to check to see if this transition is seamless – some hybrid solutions require manual intervention, which somewhat defeats the purpose. Also, for mission critical fax needs, a hybrid system can reduce your need for a full disaster recover/high availability architecture.
Cloud fax prices will vary and can be impacted by volume commitments, contract length, and SLAs. Typically you can get better pricing in two ways: commit to a higher fax volume or increase the term of your contract. For volume commitment, it’s important to be able to estimate your average volume and commit to a number that gets as close to that as possible. For example, if your fax volumes range from 40,000 to 50,000 pages per month, but you have a few months where that might dip, you might be safe committing to 30,000 pages per month. This gives you a little buffer if one month happens to dip below your minimum expectations. If your fax volumes vary more significantly, or you are trying to get closer to your average, look at plans that allow you to true up over a longer period rather than monthly. If you have trouble trying to estimate your volume, or you’re incorporating a lower volume in the first few months into your average page calculation, ask if you can have a ramp-up period where minimums aren’t enforced. Some vendors will calculate your average monthly volume over a year, so a dip in one month may be compensated for with a higher volume month later and you will not be penalized. Depending on your industry and fax volumes, you may want to use a number that is 70-80% of your average monthly volume to avoid paying for unused fax pages if your faxing is seasonal or highly variable. Increasing contract terms can also provide better pricing but locking into a multi-year contract puts you at risk if there’s a significant change in your business.
Service level agreements, or SLAs, are often used by fax vendors to provide guarantees on up-time and deliverability, and support response times. Better SLAs often correlate to higher prices, but depending on the criticality of your faxing, the increase in pricing may be justified. Also consider other aspects like the vendor’s history, certifications, and security practices. SSAE 18, SOC 2, HIPAA, and other certifications can be a good indication of a high level of service. The axiom “you get what you pay for” holds true for fax, as it does for most other products and services.
Once you finish this exercise, you should have a pretty good idea of costs for a fax solution in your environment. But remember, at the end of the day, costs by themselves shouldn’t always drive decisions. Obviously you want to minimize costs as much as possible, but also consider your time, energy, and mental health – if you’re constantly dealing with issues, it may be costing you a lot more than just dollars and cents. What Ben Franklin said over 200 years ago seems to apply even more now – “the bitterness of poor quality remains long after the sweetness of low price is forgotten.”
If you’d like help calculating your enterprise fax system to support a cloud, on-prem, or hybrid fax initiative, Biscom can help by providing a cost analysis, architect a solution, and provide guidance based on your needs. Contact us at [email protected], or 978-367-3655.