The market for fax modem software is a confusing and uncertain one, at least when it comes to single-user packages. The sector that was almost single-handedly created by Delrina with its Winfax package (bought by Symantec) has seen the advent of a number of bundling deals giving software away for free, and Microsoft pushing its weight behind its own fax utility in Windows 95. Despite this, companies further up the market - selling network fax packages for multi-users - believe the market for fax software is buoyant.
Equisys, publisher of Zetafax Lan fax software for Windows NT, believes the corporate market for fax software is about to take off. Earlier this year, an IDC survey said the number of Lan-connected UK employees using fax software could rise from 18 per cent today to about 60 per cent by the end of the year and to 83 per cent in three years' time.
The survey discovered that small firms - those with fewer than 100 employees - were most keen to start using network fax software applications, and that 93 per cent of staff in such companies were expecting to use fax software by the end of 1998. Among large companies the rate was big enough to suggest that the high-end market may well be kick-started, and that the most likely corporate environment is one that combines fax and email.
Equisys MD Chris Oswald admits that answers to surveys can be more wish fulfilment than an accurate picture of genuine buying intentions, But, he says, the fax software market is set to grow. 'Lan fax software is on every network manager's shopping list. The trend is for rapid growth.'
Two other surveys by IDC conclude that the number of faxes sent using software will outstrip those sent by fax machines within three years, and that 96 per cent of companies want combined fax and email networked packages.
Oswald says the latest version of its network fax software, Zetafax 5, has been designed to fit in with email platforms such as Microsoft Mail and Lotus Notes. Fax software is a category that has a broad appeal to resellers, he says. It can be sold shrink-wrapped, with the manufacturers providing support, for low-end office equipment hardware suppliers that want to branch out from selling fax machines but do not have the technical skill to support software. Higher-end Vars with networking backgrounds are using fax applications to add customer value. But not all resellers are convinced that fax software offers a huge sales opportunity.
Karl Tayfoor at dealer Karlton sells Winfax, but comments volumes are not large. 'The latest version of Winfax had some integration problems which has not helped sales,' he says. The other factor that could affect the development of the market for dealers is that Microsoft has put rudimentary fax software in Windows 95.
This could have one of two effects, according to dealers. It could either destroy the standalone fax software market or it could encourage users to seek out better programs and open their eyes to the potential of fax software.
Dealers tend to be more openly pessimistic than manufacturers about the market. 'It's doubtful what the future is for separate low-end fax software packages,' says Tayfoor. 'There is a reluctance among dealers to commit to it as a category because its future is uncertain.'
The market is also affected by a large number of bundling deals, says Romtec analyst John Ses. This means that users can obtain reasonable fax software free when they buy a fax modem, and this too could reduce the number of sales of standalone packages.
This view is backed up by Traveling Software, which has stalled future releases of its Commworks software suite, which includes fax capability, because it sees no future in faxing for the mobile user. 'Fax capability is not adding value,' says international product marketing manager Kristin Favour. 'There is not a great future for it.' She says Microsoft's decision to include fax software in the operating system also convinced Traveling Software to withdraw from the fax market.
Traveling Software is concentrating on the remote user, with packages like Laplink, she says. Mobile users already have access to fax machines and do not need fax software.
'Mobile workers are a growth area,' says Favour. 'Fax is not a growth area. One of the reasons for this is the increasing availability of fax machines for business travellers in hotels and airports, allowing users to send faxes without having to use software.
She adds that existing Commworks users would be supported for the lifetime of the package.
But some firms still see continued growth at the low end of the fax software market as well as the high end. Publisher Red Rock says that single-user sales of its u100 Fax Now package have led to sales in offices and larger accounts. Red Rock sales director Stephen Anderson says only about five per cent of its sales are standalone products, but that it is potentially still a large market.
He says: 'All manufacturers and dealers are interested in corporate sales.
But that is just a small sector of the overall market.' Red Rock has a background as a Castelle partner, selling the high-end fax integration package, but bought the Fax Now package from another UK company. 'We were sceptical about selling a low-end package at first,' he says. 'But we have been surprised at the volumes.'
Anderson takes an optimistic view about Microsoft's entry into the fax software market. 'It's a double-edged sword,' he says. 'The Microsoft utility is not as functional as users would like so they will want to trade up,' he says.
The Windows 95 marketing drive has also opened up the software market to many users that have not bought such software before, and many that did not know that fax software existed. So, the argument goes, Windows 95 might just expand that market.
The other challenge at the low end of the market is the market supremacy of Winfax. The package carved out the fax software market and became the generic standard, aided by a number of bundling deals. Delrina consistently held about 70 per cent market share, but competitors claim that the package has been slow to move from its standalone roots.
'Since Winfax's acquisition, the product seems to have lost its way,' says Anderson. 'It's very strong as a standalone package, but the network side is not as strong and that is the way the market is going.'
He says the other trend developing is for unified messaging from the desktop. Users want tighter integration between fax and email packages and other applications that they run on the desktop. They want to be able to fax from their existing application rather than having to quit and go to an unfamiliar interface to send a fax, he says.
Comms distributor DMST sells both high-end network fax software and single-user packages. Pat Harvey, MD of the company, says that single-user fax software is not really a separate market and tends to be bundled with modems. The only market for these packages, he says, is the after-market - users that have a basic bundled piece of software and want to trade up.
Harvey agrees that the standalone market will ultimately disappear, as Delrina-type products get more tightly integrated into ever more sophisticated operating systems.
At the higher end, DMST sells Castelle Fax Press, a hardware and software solution that plugs into a network and attaches to multiple fax lines.
Harvey says the advantage that Fax Press has over other network packages is that it eliminates server crashes by performing all fax rasterisation and processing in isolation, so that problems do not affect the wider network environment.
Also competing at the high end for fax software sales is Wordcraft, with its technically advanced Laserfax package. Unlike the more conventional fax packages, Laserfax links directly to the fax machine, enabling the network user to turn an ordinary fax machine into a printer or scanner.
Wordcraft also sells a single-user version of Laserfax, but at u295 it is more expensive than Winfax or its rivals.
'Laserfax is not aimed at the home user,' says Wordcraft representative Maxine Swords. 'It is aimed at groups of up to 500 users. We do get customers that have outgrown Winfax and want to move on.'
Laserfax is trying to take advantage of the tight integration with fax machines by bundling the software with the products of a number of fax makers, including Minolta, Brother and Amstrad.
Wordcraft's dealers break down into two camps. 'There are PC literate dealers that sell Laserfax as part of an overall network,' says Swords, 'and there are the fax dealers that don't normally sell software, but want to differentiate themselves.' Any dealer that wants to sell Laserfax, which is a reasonably sophisticated product, has to go on a two-day training course, says Swords.
The price is u95, and users get a four-user demo in return. For the customer, Laserfax has the advantage of concurrent licensing, which means that many users can have the software installed, and the limitation is only on the number of users that are faxing concurrently. The main drawback for a Var with products like Laserfax would be that they could end up competing for sales with fax dealers that have lower overheads, but could offer the same software.
Duncan Little, MD at distributor Unidirect, says the best way to avoid the uncertainty of the low-end fax market is to focus on the Unix platform.
'The Windows fax software market has always been cut-throat,' says Little.
'Many top packages started life as shareware that someone saw potential in and developed. That does not create a stable market.'
He says resellers higher up could be affected if Microsoft brings fax capability into its high-end operating systems.
Unidirect is the sole UK distributor for what it claims is the leading Unix fax software package, VSI Fax.
'Unix is a more stable market,' says Little. 'Software for the market tends to be more robust and reliable.'
Companies running Unix tend to be larger and take a more long-term view of IT, he says. But there are also fewer of them, and consequently fewer resellers. Unidirect has about 60 resellers selling on the VSI Fax package.
Fax software has always been a notoriously hard category to sell in terms of business benefits. 'Companies can get by without having dedicated fax software,' says Little, 'but they are more efficient if they use it.'
To help sell fax software, Unidirect issues resellers with notes based on stressing the benefits to business. Little says the main saving comes in the speed of sending a fax from the desktop, rather than having staff queuing at the fax machine.
It seems certain that the market for high-end fax software is set to grow, although IDC's figures for Equisys probably give more of an indication of what firms would like to buy than what they will buy. The fit between email and faxing seems likely to come closer, with users wanting network packages that let them do both without leaving their native applications.
The market for standalone packages is less certain.
Ultimately the market looks set to decline, as more features are included in the operating system. But for now the decline seems to be being held up by an influx of new PC users that are continuing to buy standalone packages, or more likely single-user fax packages that are included in software suites.
The inclusion of fax software in Windows 95 might encourage the fax software market in the short term, but in the long term it seems set to sound its death knell.
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