Market Research

Davidson Consulting has published a new report on FoIP Server Markets, that says the market will grow rapidly during the five-year forecast period, from $130 million in 2009 to $415 million in 2014, a 26.1% compound annual growth rate (CAGR). The fact is that switching from conventional fax servers to FoIP servers saves companies money and so businesses are making the switch. The market growth will also be driven by the virtualization of fax servers, the desire of companies to centralize their fax operations, to enhance their VoIP initiatives with FoIP, and to endow their multifunction peripherals (MFPs) and fax machines with audit trails to satisfy compliance regulations.

Overall, FoIP servers generated 88% of 2010 revenues, while hardware-based sales accounted for 12%. By 2013, hardware sales will be flat and will start to decline.

This year, Open Text is the leading FoIP supplier, as its FoIP revenues increased by 46% to $54 million. This placed the company just ahead of Sagemcom whose FoIP revenues only increased by 6% from $48 million to $51 million in 2010. Sagemcom’s results were hurt by the conversion from euros to dollars which decreased the company’s revenues to $51 million, whereas, if the euro conversion had stayed as it was last year, Sagemcom’s revenues would have been $55 million, causing it to retain its leadership position. Sagemcom derives about 80% of its revenues from Europe.

SIP (session-initiation protocol) trunking and fax is a key issue for market growth. SIP trunking is a service offered by an ITSP (Internet Telephony Service Provider) that permits businesses that have a PBX installed to use Voice-over-IP (VoIP), by using the same connection as the Internet connection. SIP trunking eliminates can save in overall telecommunications costs. By extending the SIP capabilities of the corporate network outside the LAN, satellite offices, remote workers and even customers can use VoIP and other forms of realtime communications applications to share ideas and increase productivity. But, as reported in last year’s research study, SIP trunking has created and still creates fax interoperability problems. Moreover, even though the SIP standard is written with interoperability in mind, integrating SIP equipment from different vendors always takes time because, all too frequently, minor inconsistencies exist in how the different vendors interpret the SIP specifications. If a company is looking to use SIP trunks from more than one vendor, they still have to deal with the complexities of interoperating with several SIP trunks that each behave in different ways. SIP trunking is giving enterprises pause even just for VoIP. Many corporations, especially large ones, are hanging back from SIP trunking as a result.

With regard to FoIP and SIP trunking, the current situation is that most businesses that are using SIP trunking are small-to-medium-sized companies that want the cost savings and don’t have to think about any other interoperability problems. Large companies are mostly just starting to look at SIP trunking with fax. These companies are the meat-and-potatoes of the FoIP marketplace and when they start taking leaps into the SIP trunking market, it will be a watershed event.

Today, the Fax Task Group (FTG) is testing T.38 FoIP with the 37 Internet Telephony Service Providers from the i3 Forum who represent a combined subscriber base of over 1.5 billion in over 100 countries. The FTG is overseeing the FoIP testing and they are initially testing 14 different IP carrier networks, which includes 14 different environments. Several of the networks have never used T.38 faxing and another tore down any call where it detected a fax. So the Fax Task force has its hands full ironing out the wrinkles. But it is making progress. At the time this report was written, such interoperability was starting to be accomplished between the 14 different carrier networks. By 2012, interoperability should be accomplished between the 14 carriers, and from there, the assumption is that the other 23 carriers in the i3 will follow suit.

Meanwhile, FoIP has changed the game in terms of arguments that Internet fax service providers make. The Internet fax service providers have traditionally made their arguments comparing fax services to conventional fax servers, but FoIP servers eliminate many of these arguments. Such eliminated arguments include telecom costs, which are cut by FoIP servers as well as by Internet fax services, the cost of hardware upgrades, which goes away when businesses install softwarebased FoIP solutions, and maintenance costs, which are less with centralized FoIP solutions and less with hardware-less FoIP installations. In fact, in many cases, the support cost difference is very small or non-existent. Still, the Internet fax service vendors do have some advantages in system capacity and disaster recovery, but FoIP server suppliers who also sell fax services, like Biscom, can neutralize both arguments. Finally, FoIP vendors have an advantage when it comes to MFP links, where they sell rich links and the Internet fax service suppliers only sell links where the MFP must handle email which does not meet with compliance regulations. The report is available from Davidson Consulting for $3,500 and is payable by check with a purchase order or by Visa, MasterCard or Amex. Davidson Consulting can be reached at 269-651-3157 or by email at peter@davidsonconsulting.biz.

Fax Messaging Markets, 2011-2016:   This report covers internet faxing, broadcast faxing, and production faxing as outsource services. The report covers market growth in revenues and also shows Internet fax subscribers. Internet fax is covered in terms of both enterprise and individual market segments. The report also delves into key issues including compliance, fax servers versus fax services, fax machine connections, fax over IP, and patent law, the latter possibly being resolved one way or the other within the next year.

j2 Global, the leading Internet fax service supplier, has acquired Protus, the number two Internet fax service provider and the one that was growing the fastest. So j2 Global now dominates the Internet fax services market where it has 42.7% of the individual fax services market compared to just 4.4% for the next leading vendor. EasyLink, the second-leading enterprise fax services vendor, acquired the Xpedite division of Premier Global, which was the leading enterprise fax services vendor, thereby becoming the clearcut number one enterprise fax services vendor. EasyLink now has 46.9% of the high-end enterprise fax services market segment compared with second-place j2 which has 11.3%.

The overall fax service industry will increase from $1,010 billion in 2011 to $2,045 billion in 2016, a 15.2% compound annual growth rate (CAGR). Published in November, 2011. The price of the report is $3,500. Contact 269-651-3157 or peter@davidsonconsulting.biz. .

Computer-Based Fax Markets, 2010-2015:  In July of 2011, Davidson Consulting published its latest market research report on computer-based fax. The report predicts that the market will grow from $350 million in 2010 to $620 million in 2015, a 12.1 CAGR (compound annual growth rate). This fast growth will be driven by the rise of fax over Internet protocol (FoIP) servers, the emergence of production fax as a key market segment, businesses connecting multifunction peripherals (MFPs) to fax servers, and the fact that many businesses will continue to support traditional TDM (time-division multiplexing) rather than move to FoIP.

The 95-page report analyzes key characteristics of the computer-fax market production fax versus desktop fax usage, inbound routing methods used, and environments to which fax servers interface. The report also analyzes fax board use by FoIP versus TDM and by how many boards were sold with fax servers and how many with Internet fax services. Open Text was the overall leader. The report also profiles 43 fax server vendors and 6 fax board vendors and provides market shares for fax servers, IP fax servers, production fax, regional fax servers, fax boards, fax boards in the US and Europe, and regional fax servers. Open Text was the overall leader. The report also provides forecasts for 12 different aspects of the computer-based fax industry.

The report is available from Davidson Consulting for $3,500 and is payable by check with a purchase order or by Visa, MasterCard or Amex. Davidson Consulting can be reached at 269-651-3157 or by emailing to peter@davidsonconsulting.biz.