When Peoples Trust Insurance was four months old, the Boca Raton, Fla. homeowner’s insurance company brought a previously outsourced call center in house. Before long, the company’s lone fax machine was overwhelmed, in use four times more than before as telemarketers sent and received page after page of insurance quotes and forms.

It fell to Peoples Trust IT manager Brian Alldread to figure out how to upgrade. After weighing all the options, Alldread chose an Internet-based service that employees could use to send a fax to an e-mail address or vice versa. The service cost less than buying multiple fax machines or installing a fax server on the company’s intranet, and the vendor Alldread chose had the service up and running in a few hours.

Since making the switch in May 2008, Peoples Trust’s call center has jumped from 10 employees to 80. Although he’s dealt with a lot of technological challenges as a result, faxing hasn’t been one of them, Alldread says. One of the toughest jobs for an Internet fax vendor is adding and deleting users as employees come and go, but the vendor Peoples Trust uses, Seattle-based Concord Technologies, processes requests in minutes. “It’s been one of the easiest parts of running IT,” Alldread says. “Especially in a growing company, it takes the burden off of you.”

Like Peoples Trust, more small businesses are switching to Internet fax services that give them the convenience of sending and receiving fax transmissions without the hassle of maintaining the equipment. Since it first appeared more than a decade ago, approximately 30 percent to 40 percent of small businesses have adopted some form of Internet-based faxing, according to Peter Davidson, a long-time fax industry watcher and head of Davidson Consulting in Sturgis, Mich.

Many businesses still use fax machines

Despite that progress, approximately 25 million U.S. businesses -- large and small -- still use traditional fax machines, according to Davidson. Insurance, real estate, and manufacturing industries are big fax users as are other businesses that deal with contracts and paper forms, he says.

But even companies in fax-heavy industries are starting to look for alternatives, especially those adopting sustainable business practices such as reducing the office paper they use, Davidson says.

Prices for Internet fax services range from $10 to $15 per month per fax line and 6 to 12 cents per transmission for a home-based or small business to $6 to $9 a month and 4 to 8 cents per transmission for larger companies with dozens or hundreds of fax users, according to Davidson. By contrast, a company could spend $600 to $800 per port setting up a phone-based fax server, not including charges for software or phone lines, or close to $1,000 for an Internet-based fax server on a company intranet, Davidson say.

To determine if Internet faxing makes sense for your business, figure out how the cost compares to what you’re using now as well as to the capital expense of buying and maintaining a fax server, he says.

If you’re a medical practice or other business that faxes a lot, an Internet fax vendor’s reliability could be just as important as cost. Concord Technologies, for example, has two data centers “so if one blew up our customers’ fax numbers would keep working,” says Ralph Musgrove, the company’s executive vice president.

As with other online applications, Web-based fax gives people the flexibility to use the service from anywhere, says Mike Pugh, senior vice president of marketing at a href="http://www.j2global.com">j2 Global Communications, which runs eFax, eFax Corporate and a handful of other Internet-based fax brands. “They can get a fax wherever they can open a notebook,” Pugh says.

Many Internet fax services also have built-in administrative tools that allow a fax system manager to create policies, generate reports and manage individual users.

Companies looking to make the switch will find many vendors now offer package deals of Internet fax and voice over IP services. If you’re in the market for fax, “It does make sense to ask them about voice as well right now,” says Davidson, the fax industry analyst.

SIDEBAR: Internet Fax Resources and Providers

Here’s a list of Internet fax resources and providers:

  • FaxCompare.com -- Comparison chart of seven vendors of Internet fax services for small businesses.
  • BisCom -- Offers range of fax services, from Internet-only to enterprise-level fax servers.
  • Concord Technologies -- Started in 1996 to run part of what used to be Delrina WinFax, the pioneering fax-modem software company.
  • EasyLink -- Offers Web-based fax, fax hosting, e-mail messaging, and other services to small business and enterprise customers.
  • eFax Corporate -- Business version of popular eFax consumer Internet fax.
  • Protus IP Solutions -- Offers fax, phone, and e-mail marketing products.