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  Faxage Interview .............................Special Article Feature

Recently, did a very detailed interview with Christian Watts, co-founder of Faxage. Operating out of Denver, Faxage offers some of the best prices on Internet Fax in the marketplace. This "Q & A" session explains how Internet Fax works and how it can help companies cut costs and lower operating expenses. More specifically, it details how Faxage can benefit small to medium size businesses with handling all their faxing requirements in this very harsh economic climate.

Faxage Image Interview With Christian M. Watts

These questions were put to Christian Watts, co-founder of Faxage:

1. If you were given a chance to speak to a conference room full of small business owners and work-at-home entrepreneurs, how would you describe Internet Fax to them and how using such a service would help their businesses prosper?

Internet Fax is essentially a service that allows you to send and receive faxes using your email and/or other online means (such as a web site) as opposed to using a traditional fax machine. The primary advantages of Internet fax are two-fold: 1) Cost savings and 2) Location independence.

In terms of cost-savings, Internet Fax (by contrast with a traditional fax machine) offers:

1. Lower per-minute/per-fax rates than with traditional telecommunications for long-distance fax sending and toll-free fax reception. This is due to the providers being able to leverage the volume of all of their customers for better rates with the telephone carriers.

2. No paper, toner, fax machine maintenance cost (on average, industry estimates range from 1-3 cents a page for this alone)

3. No stand-alone phone line cost (40-60 dollars a month in most markets)

Location independence is an added benefit of Internet Fax over the traditional fax machine. Essentially, the phrase means that you don't have to be present at the fax machine to get your fax you can get it anywhere you can get email. This offers:

1. Increased opportunity in terms of being able to respond to deals more quickly.

2. Ability to have part-time or work-from-home workers access faxes to save time and/or save money on office expenses.

3. Work efficiency and thereby work reduction to achieve similar results.

2. Furthermore, in light of the current economic conditions, how does Internet Fax and in particular how does Faxage, help those same business owners compete in this very competitive business climate?

Ultimately, Internet Fax increases a company's competitive edge through reducing cost and speeding response time both in receiving faxes (that may contain orders, bids, or other time- sensitive and/or revenue-creating information) and in sending faxes including responses to orders, bids, etc.

FAXAGE in particular is advantageous because:

1. Pricing is among the lowest in the industry, enhancing cost savings.

2. Flat-rate plans are available, increasing predictability and helping to smooth costs over time as compared to traditional telecom and other fax providers that have much more variability built into their plans.

3. FAXAGE is multi-user out of the box. That means a single account can allow access for everyone in the business at no additional charge. This allows more people to work faxes at various times or for various kinds of faxes and enhances cost efficiency since all usage for the company is in a single 'bucket'.

4. FAXAGE offers real-time billing access to monitor usage and costs, which many competitive providers do not. Cost control measures are more important in these times than ever before.

The upshot is that, in order to compete, companies need to have a lower cost profile than their competitors and, at the same time, be more agile and quick to turn around customer requests than the competition. Internet Fax and FAXAGE in particular enable both of these attributes.

3. Staying with the same theme, everyone on the planet at the moment is now laser-focused on cutting costs and business expenses. Can you talk directly about the cost-savings associated with using an online fax service such as Faxage?

This is a little bit back to question 1 a primary opportunity with Internet Fax is cost savings. Taking an example company that uses a moderate amount of Fax in their business say 300 pages a month, 200 incoming and 150 outgoing (assuming most calls are local, but some long distance), here's a cost comparison of traditional fax versus FAXAGE:

              Traditional Telecom

                                    Item/Quantity                 Monthly    Cost/Unit     Total
                                    Dedicated Phone Line          1	    $50	        $50
                                    Receive Paper/Toner	         200	   $.02               $4
                                    Send Long Distance	         50 	   $.03	        $1.50
                                    Total  ....................................................     $55.50

          FAXAGE (Professional Plan shown)

                        Item/Quantity	     Monthly  Cost/Unit     Total
                        Professional Plan Fee   1	  $7.95	     $7.95
                        Inbound Overage	       50  	  $0.05	     $2.50
                        Total ...................................... $10.45

Of course, as volume goes up, the cost savings opportunity increases. FAXAGE also offers a 'recommendation' tool on our pricing page Pricing Faxage . where you can plug in your expected usage and the system will tell you the cheapest plan to have and how much you can expect your cost to be for your individual needs.

Another nice point is that (on the 'Lite' and 'Professional' plan levels), there is no additional cost for a toll-free number with FAXAGE. So, if your needs fit one of those plans, you can help your customers save costs as well as give them a small incentive to do business with you by offering a toll-free fax number.

4. Faxage has several different monthly fax plans, but you also have one of the lowest monthly plans at $3.49, how can you offer such a low rate? Or is this a "loss leader" for your company?

Frankly, we follow our own advice. We keep our cost profile low relative to our competitors. This allows us to offer better rates not just on the 'Lite' plans at $3.49, but on our other plans as well.

The other part of the story is that the $3.49 'Lite' / 'Toll-Free Lite' plans are really designed for companies and individuals that just need to do a modest amount of faxing each month. The 5 cent per minute usage rate with that plan is still very competitive, but it's a pay-as-you-go situation. So, bottom-line is that we're willing to bundle less into the plan, take less fixed-fee on the plan, and allow customers the opportunity to pay only for what they use. It's a win-win scenario for us and our clients.

If people find that they use it more (or less), from time to time, FAXAGE offers the opportunity to upgrade and downgrade plans simply by emailing in a request (and never at any additional fee). Cost conscious clients generally monitor their usage throughout the month and adjust at the end of the month accordingly. Since FAXAGE bills in arrears, it's relatively pain-free to optimize the cost of getting exactly the amount of service needed.

5. As a day-to-day operator of an online fax service, what are the most common customer problems you have to deal with? More so, when your fax clients sign-up, is there a learning curve to using Faxage or any fax service for that matter?

There is a modest learning curve involved in using any Internet Fax service - no more so with FAXAGE than with any other, I think, but it is there.

There are essentially three categories of recommendations I make to ease transition for clients:

1. Make sure you have a good email account that is suitable for the amount of faxes you intend to receive and store. Frequently, clients using free email such as Hotmail or Yahoo run out of storage and then their faxes are not delivered because their email box is full. FAXAGE does mitigate email difficulties by also storing a copy of every fax received or sent in the FAXAGE website for access. Not all providers do this, so it's something to check on. Things can (and do) happen with email, and it's best to make sure that a backup mechanism is in place with your fax provider so as not to lose important faxes.

2. FAXAGE, in particular, offers extensive documentation and frequently asked questions - in our 'learn more' area Faxage Learn and Faxage Docs .

Reading the directions is sometimes painful (and, therefore, frequently not done) however, our documentation really does provide answers to 95%+ of questions people have when starting out.

3. Email and telephone assistance are available and we, at FAXAGE, hope you will use them. We're happy to help out and would really prefer to answer questions and get things working versus having a customer that is frustrated with trying to do it all themselves with the system.

6. For any techies reading this, can you explain in a very detailed technical way how Internet Fax actually works. Don't give away any trade secrets, but can you briefly explain how Faxage operates or is set-up?

Ultimately, every Internet Fax service works for receiving faxes by having some sort of dedicated phone numbers coming in to fax servers at their site or sites. Once a fax is received on the fax server, it is converted to a suitable format (PDF or TIFF with FAXAGE, PDF by default) and then sent to the customer. In our case, we send these as email attachments and store them in our website as well by default. FAXAGE offers many customizable parameters around the messaging for received faxes, ability to route fax received' emails to an unlimited number of email addresses, API methods for receiving faxes into systems, etc.

On the sending side, the process is reversed the customer sends in an electronic document (either via email, website, or, in the case of FAXAGE, an API method is also provided), the system converts it to a format suitable for faxing (The fax standard is G3 or G4 TIFF) and sends it out via a fax server. Status is then posted to the FAXAGE website as well as emailed back by default. Again, FAXAGE offers a lot of flexibility around number of retries, resolution to use, priority control, which users can send faxes in a given account, etc.

Where services differ are in a few key areas that are worth asking about for the highly technical:

1. Actual technology used to interface with the telephone network. Some providers have attempted to use VoIP and T.38 (or even just straight uLaw over VoIP connections). This will not work well due to fax needing a very high call quality to be successful. VoIP - with it's attendant jitter, packet loss, and the various compensations that are put in to VoIP networks to compensate for voice calls - is just generally not a suitable medium for faxing unless the provider has control over both call endpoints and the network in between (which fax providers generally will not). Thus, while slightly more expensive, TDM (Time Division Multiplexing, or traditional telecom) should be preferred by customers for reliability and speed reasons. FAXAGE uses all TDM T1 / PRI or higher interfaces to connect to the telephone networks and internally operates a high-end redundant TDM network to interconnect our call-processing systems, ensuring the highest possible call quality.

2. File types supported for faxing. It's not so important to go with a provider that supports the most types of files, but it is important to make sure the provider you pick can support the types of files you want to send.

3. Systems redundancy many providers will not have or will be reluctant to share much information in this area (as the actual design of the system is somewhat proprietary), but it's worth finding out what you can as this will speak to the reliability of your service overall. All key components (front-end, middle-tiers, back-end, call-processing, even telecommunications circuits) are redundant in the FAXAGE network.

4. Use - case scenarios - make sure the provider you pick has enough flexibility to support whatever your business process is or is envisioned to be. Asking up-front how to accomplish a given set of goals can save a lot of headache down the road. One of the first key stumbling blocks with many providers is supporting only one or a limited number of users in a given account having to manage multiple accounts can quickly eat up efficiency and cost savings, so it's key to find a provider that allows unlimited users if you expect to need multiple people accessing the system. FAXAGE has this capability out of the box.

7. As of yet, Faxage is not as well known as some of the other fax service providers, can you give a detailed history of Faxage so that readers and potential future clients can better understand your service and company.

A good read on this is here: About Faxage .

To summarize, though, FAXAGE essentially started out in the fax service space in 2002.

At that time, our parent company - EC Data Systems - was building an electronic document management system and needed fax services. An exhaustive search for a provider revealed that, at that time, there wasn't much in the Internet Fax space for small/medium business customers, so we ended up building our own capability. Once we had run that for a few years and worked out a lot of the kinks, we unbundled our Internet Fax capability and - in 2004 - launched the FAXAGE service.

Since 2004, we've been growing the FAXAGE service, and it is now nearly 100% of EC Data Systems' overall business.

Because FAXAGE was built originally to address our own needs as a small/medium business and to overcome the shortcomings of offerings that existed at that time, it continues to be an overall leader in terms of value in the small/medium business space.

We've been at this for about 5 years now (with FAXAGE specifically), and experience in this space has really paid off as we've scaled up over time. Reliability often comes with experience, for instance. That and our customers think of enhancements and make suggestions that we wouldn't think of on our own. We've had a really good track record with getting improvements implemented that help our clients do business more effectively.

So, we didn't start out saying 'let's build an Internet Fax company', but we ended up with an Internet Fax service that was designed from the ground up to offer a very low cost structure (thus, low rates for customers) and the functionality, flexibility and reliability that business customers need.

8. Faxage has been growing rapidly over the last few years, and you are now offering more local fax numbers in more and more states, could you tell us about this growth and how Faxage is expanding?

Offering local service is primarily a function of finding the right local carrier partners that can offer service in a given area and interconnect with our systems in a way that:

1. Ensures quality - it is more important to us to serve specific areas well and with high quality than simply to cover as many areas as possible.

2. Keeps our rates where they need to be for our customers - We have never increased prices in our entire history (though we have lowered a few of our pricing plans over time), and we intend to keep it that way.

Given that, FAXAGE is always on the lookout for new interconnection opportunities. At present, we expect to keep our existing local service base which services over 61,000 exchanges covering about 80% of the US population, statistically fairly stable for the next 6-9 months and then have a round of further investment and expansion in local service planned towards the end of 2009 and early 2010.

For areas not covered with local numbers, FAXAGE offers toll-free numbers.

9. Going forward, what are your goals and objectives for Faxage? Where do you see it in 5 years, 10 years?

FAXAGE has a good business model and we're very satisfied with how our strategy of being a value-leader (best price for performance) company is working out. Our company has doubled in size year-over-year for the past two years and, thus far, it's looking like that is a trend that will continue.

One way to look at FAXAGE's value-space is to say that the service is doing a great job of offering what people need at a price that is attractive. The next step is to keep that price, but increase the value added. We expect to do this in several ways:

1. Enhance ease-of-use through various mechanisms.

2. Establish additional carrier partnerships to increase local number inbound coverage we expect to cover most of the United States within the next 2-3 years.

3. Expand support hours and resources for our clients to use.

4. Continual improvement of the operations side of FAXAGE overall reliability, scalability, etc. - are very good at this point, and there is always room to architect more efficiently.

Ultimately, though, FAXAGE is not looking to own the market. Our goal is to have a good solid base of clients that feel we add value to their businesses and to be able to provide the kind of personalized service that is rare in any Internet or online service in general. Internet Fax is an enormous marketplace, and we're looking to maintain and enhance our reputation as a solid player while focusing on our niche around small and medium business use as opposed to trying to be all things to all people.

10. Your Elevator Pitch, we saved this one for last! If you had the opportunity to give a quick 90 second sales-pitch to any potential customer or user of Faxage - how would you convince them to hire you or your company to handle all their faxing needs?

The choice of Internet Fax provider comes down to functionality, reliability and price. Does it do what you need? Does it do that consistently and well? Do you get more value from the service than you spend on it?

FAXAGE is built precisely to address these points. We've designed the system from the ground up to do what small and medium business customers need and we regularly enhance the system based on our clients' feedback and requests. Our reliability speaks for itself we have several clients relying on us for tens of thousands of business-critical faxes a month and they've been very open about how much better off they are with FAXAGE handling their needs than they ever were doing it themselves (and it costs less, too). And, of course, money talks FAXAGE is far more cost effective than doing it yourself and is less than our competitors in many cases.

Update: FAXAGE now has Microsoft Office Integration for Office 2003, 2007, 2010 and 2013.

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