Fax Services Market - Global Outlook & Forecast 2023-2028

MARKET OVERVIEW

The global fax services market is valued at USD 3.18 billion in 2022 and is expected to reach USD 5.96 billion in 2028, growing at a CAGR of 11.05% during the forecast period. Fax services have allowed healthcare employees to speed up document approval, collection, and data processing to generate more investment, sales, and revenue, helping to increase their utilization among healthcare providers. Further, the strict government regulations regarding the security and privacy of the patient data industry prefer to use fax over other modes. Additionally, the fax services market is expected to witness significant growth in the coming years, owing to the increasing adoption of digital fax services by numerous businesses to meet the requirement of document delivery. Also, factors such as data transmission security in the telecommunications industry positively impact market growth.

The fax services have undergone substantial transformation in the past two decades, yet organizations continue to rely on traditional fax methods, representing roughly 10% of fax usage. Traditional fax machines persist in use across the globe. A significant leap in the evolution of modern fax systems can be attributed to the advent of digital technology, where analog signals from scanners are converted into digital format and subsequently compressed. This advancement has enabled the transmission of large volumes of data over standard phone lines. Large enterprises worldwide still prefer on-premises FOIP (Fax Over IP) solutions. However, the growing adoption of cloud-based VOIP (Voice Over IP) services is poised to fuel the emergence of hybrid fax services, thus contributing to the anticipated expansion of the fax services market.

Furthermore, the rising adoption of Cloud-based fax services across healthcare, automotive, telecom, retail, and other industries for secure and reliable communications solutions and the increased focus on digital transformation drive the market's growth. In addition, factors like increasing demand for cost-effective communication solutions, rising adoption of cloud-based technologies, and increasing awareness about the advantages of cloud-based solutions and integration of AI and ML are likely to drive the market.

Moreover, the rise of online fraud and data breaches is prompting organizations to adopt secure fax solutions that protect their confidential information. However, faxes can be vulnerable to security threats such as malware and hacking, compromising the confidentiality and integrity of sensitive information. Human error or fax software problems can cause documents to be sent to the wrong recipient, potentially leading to data breaches and other data security issues. Cloud-based fax services may experience data loss or corruption, which can permanently affect the confidentiality and integrity of the data transmitted.

KEY FACTORS

• In fax services, technological convergence involves the incorporation of fax functionalities into enterprise resource planning (ERP), systems applications and products (SAP), and customer relationship management (CRM) systems.
• The emergence of various cutting-edge technologies, including 5G, Machine-to-machine (M2M) communication, IoT, automated intelligence, cloud computing, and digital fax solutions, drive the fax services market. These innovations are expected to propel the market's growth during the forecast period.
• Key drivers for the fax services market include the attributes of cloud-based fax services, which offer flexibility, high performance, and reliability to organizations seeking seamless fax communication from their ERPs, desktops, or other business applications.
• Automation, particularly as a feature of computer-based fax services, is in high demand, notably among small and medium-sized businesses (SMBs) and large enterprises operating in transaction-intensive environments.
• Compared to alternative methods such as e-mail and web-based document transfer, the robust privacy advantages make the faxing services stand out compared to its competitors and are anticipated to catalyze market growth.
• Numerous vendors are offering HIPAA-compliant fax solutions, a move aimed at enticing healthcare providers to adopt fax services, thereby contributing to the robust market growth.

FAX SERVICES MARKET TRENDS & DRIVERS

Increasing Online Scam and Data Breaches
For numerous corporations today, faxing remains an essential mode of communication, as fax is considered more than e-mail. Moreover, law enforcement and healthcare sectors are the major drivers of the fax services market because of stringent legal requirements governing the secure transfer of sensitive data. Additionally, in 2022, nearly 3.6 million Russian internet users experienced breaches, marking an 11% increase. Such instances further propel the use of fax and its respective services to protect organizations from growing online scams and security concerns.

Rising Telecom Industry
The increasing telecom industry drives the global fax services market, using reliable, secure, cost-effective communication solutions to secure customer data. Further, the increasing expenditure on the implementation of 5G infrastructures, driven by changing consumer preferences toward cutting-edge technologies and smartphone devices, has increased the adoption of cloud-based fax services by the telecom industry because this service enables the transmission of exact documents over telecommunications networks and internet, which act a bridge among traditional and digital fax technology.

INDUSTRY RESTRAINTS

Unstructured Data
One of the reasons businesses continue to use fax is its extensive acceptance across numerous IT systems. However, since fax is a frequently supported messaging protocol, it is a capable interoperability standard. Although one of the downsides of fax is the nature of the file, it is an image file that might contain data. However, it is not structured. The unstructured information is usually text-heavy and might contain data such as dates, numbers, and facts. This results in irregularities and uncertainties that make it more challenging to understand employing traditional programs than the data stored in fielded form in databases. The data received electronically would result in the generation of a document that is not necessarily going to be easily searchable and does not fit easily into modern databases. Therefore, many major players are focusing on tackling this issue, and the send side is a convenient way of sending information since it is easy for the fax sender to have a piece of paper to that machine and send it someplace. Nonetheless, for the receiver, it is more complex; hence, the approach is to transform it into structured data and deliver it to the receiver as some structured message.

SEGMENTATION INSIGHTS

INSIGHTS BY USER TYPE
The global fax services market by user type is segmented into large enterprises, small & medium enterprises (SMEs), and individuals & home offices. The large enterprises segment dominated the global market in 2022. Large enterprises are characterized by a workforce exceeding 50 individuals and often encompassing Fortune 1000 companies, representing a substantial revenue source in the global automated fax market. They are primary contributors to international faxing revenue as well. Irrespective of the deployment model, the large enterprises segment is one of the highest revenue contributors to the global market. The major factors driving the migration to cloud-based fax services are reduced operational cost, improved productivity through automation, and increased flexibility and scalability. Large enterprises are involved in transferring thousands of faxes every month. Moreover, Apple uses the secure and reliable online fax service Fax App, which can turn an iPhone or iPad into a powerful fax machine and send faxes anytime, anywhere. All sent and received faxes are stored in a fully encrypted archive for further use and can be easily accessed without delay when required.

INSIGHTS BY SERVICE TYPE
The on-premises service type segment dominated the global fax services market in 2022. Enhanced control over data storage, high configurability, and customizability are prominent factors that propel the segment growth. These solutions also present integration options that can be tailored to align with the specific operational requirements of end-user businesses. Furthermore, organizations operating in-house fax infrastructure and owning data centers and colocation facilities will likely prefer this operation mode. This will likely drive revenue growth in this segment during the forecast period. Open Text is the major player in this market, installing more than 100,000 RightFax on-premises fax servers. Vendors also offer desktop software solutions that can be integrated with the existing office mail system and other applications to transfer fax documents.

INSIGHTS BY INDUSTRY-USERS
The global fax services market by industry users is segmented as healthcare, banking, financial services, & insurance (BFSI), legal, manufacturing, and others. The healthcare industry user segment held the largest segmental share in the market. The healthcare sector is highly regulated, and securing patient information and maintaining privacy is important. Although e-mails are an alternative to fax services, they are highly vulnerable, risking privacy. Many healthcare organizations use fax server (FOIP) solutions to transfer fax documents. Increased operational expenditure and initiatives towards operating a green environment are aiding the growth of the cloud-based fax services market.

HIPPA compliance and digitalization of the healthcare industry are likely to drive the growth of the fax services market in the future years. Healthcare providers are involved in the transfer of thousands of fax documents for both external and internal use every month. Fax requirements change depending on the size of healthcare providers. Several healthcare organizations have adopted electronic data management systems that are HIPPA-compliant. Fax services are also being adopted as an add-on to the document management system.

GEOGRAPHICAL ANALYSIS

North America is experiencing robust growth in the fax services market, owing to the increasing demand for high-speed internet access and the widespread adoption of advanced fax technologies. Moreover, North America held the largest global fax services market share in 2022. The rapid proliferation of accessible and affordable internet connections, the rising popularity of cloud-based software and services, and businesses' imperative to enhance workflow efficiency and reduce operational costs contribute to regional market growth.

The European fax services market holds a significant position in the global market and is witnessing significant growth. This growth is attributed to the increasing accessibility and improved quality of internet connectivity in the region, which has made cloud-based services such as faxing simpler and more effective. Numerous European businesses are turning to online fax services to streamline document management and delivery processes, achieve cost savings, and enhance team collaboration. Such factors are anticipated to increase the usage of fax services in the coming years as more businesses recognize the advantages of employing cloud-based solutions like web faxing. Furthermore, the region's vendors focus on bolstering security and privacy features and offering mobile-friendly capabilities. This strategic emphasis is poised to continue shaping the fax services market, creating fresh opportunities for service providers and customers across Europe.

VENDORS LANDSCAPE

The global fax services market leaders are directing their efforts towards various essential business approaches, encompassing partnerships, mergers and acquisitions, product advancements, and collaborative ventures, all designed to broaden their product offerings and augment their market presence across diverse geographical regions. The strategies related to expansion and investments encompass a spectrum of strategic initiatives, ranging from investments in research and development endeavors to establishing new manufacturing facilities and optimizing supply chains. Moreover, numerous vendors focus on improving their services by investing in R&D, technological advancements, and product development. For instance, in 2021, FaxLogic launched new blockchain-based fax solutions.

Several players in the global fax services market, have a commanding are Consensus Cloud Solutions, Dropbox, RingCentral, and OpenText. These major vendors proactively embrace innovative technologies to solidify their positions in the industry. Further, the companies are increasingly expanding their product offerings and strengthening their market positions through acquisitions and partnerships. For instance, in 2020, Biscom was acquired by OpenText, a renowned vendor of fax services.

Additionally, the on-premises fax services are transforming towards software-based solutions, with many fax board hardware providers now offering software-based fax boards. Furthermore, the adoption of virtual fax servers is gaining traction. On-premises fax solution providers are actively engaged in delivering packaged solutions to help reduce their clientele's capital and operational expenditure. J2 Global (Ziff Davis) is a significant player in cloud-based fax solutions, demonstrating a commitment to growth through strategic acquisitions. J2 Global has consistently acquired other key players, including Myfax and Metrofax.