Global UC player opens chequebook in Australia

The fax business in Australia might fly under the radar, but it's getting attention from US fax leader j2 Global, which has snapped up two Australian fax services.

Sydney-based OzeFax and the Brisbane-based Faxmate services have been snapped up by the US company, which continues to expand its activities in Australia and New Zealand.

Faxmate is a product offered by the Brisbane-based company Betteroff Networks, a nine-person business that started life as a value-added reseller in 1993. Betteroff Networks was not acquired by j2 Global.

Betteroff Networks CEO Craig Halliday said his fax business has been thriving. "February was our strongest month ever. We're still growing," he said. "It's a good path for outsourcing. People get an ROI within the first one or two months, which is pretty rare in IT."

He said there are compelling savings to be made from switching from an in-house fax server to a cloud-based service like FaxMate. "Take a corporate customer who has their own fax server and a staff member managing their own fax server. There's licensing costs, training costs - it's very easy to get an ROI."

Halliday said business was still strong from paper-based businesses - in particular, mortgage brokers, finance companies, solicitors and lawyers.

"Not everybody can have an iPhone app or a tablet app to run their business. Who wants to spend two grand to develop an app when you create a paper form in 10 minutes? There's still a very big requirement for legal documents to be signed and faxed."

Opportunities in a tight market

There's no doubt that fax is a technology on the wane in some industries: in a 2012 survey of 7,000 LinkedIn users, 71 percent picked the fax as an office tool they thought would disappear from offices by 2017.

And while the fax machine might be less common, Halliday said in some businesses fax might be here for longer. "It's very expensive to change business processes. That's one of the reasons fax will probably stick around."

"People who look down their nose at fax, expecting everything to be emailed, well, virtual fax providers satisfy those people because the faxes are received via email."

He said there is also still a large volume of marketing sent via fax, as well as automated systems that send faxes, like invoice orders and purchase orders.

Halliday also has a large number of wholesale customers: "People who put in VoIP solutions who don't have a robust fax solution. The last consideration is often fax. A lot of VoIP guys will turn around and say what you still use that?"

While terms of the deal were not disclosed, the acquisitions are one of several moves into the Australian market by j2 Global, which claims to command 30 percent of the global market for cloud-fax services.

In 2010, the US player opened up the chequebook to buy Australian-based messaging company mBox. At the time, the company announced it was expanding its network of local telephone numbers in the country.

The US company also flagged efforts to offer more voice services in the region when it also snapped up the Australian and New Zealand businesses of Zintel Communications.

J2 Global forecast revenues between US$580 and US$600 million for 2014. Overseas, it also operates CRM, unified communications and online backup services.