Faxing is alive and well for these guys

The Fax Guys“Most people think that fax is dead, but our customers would disagree entirely,” says Greg Osterdyk, who bristles at the widely held notion that facsimile transmissions are a thing of the past.

He’s got the numbers to back it up. His company, The Fax Guys, is coming off its most profitable year, with a record $5.2 million in revenue turned in 2011. If that surprises you, you’re probably not involved with one of the many industries that continues to rely heavily on fax even though the technology has faded considerably on the consumer side.

“When you dig into the business processes that companies actually use, a lot of them are still driven by paper and fax,” he adds.

Specifically, he points to financial institutions and the healthcare industry, where stringent regulations prohibit sensitive information from being transferred via email due to HIPPA and SEC confidentiality requirements. Many companies here in Minnesota still move massive amounts of data daily via fax.

The Fax Guys launched back in 1998 as Dynamic Solutions Group. Co-founders Osterdyk and Brent Lothrop continue to run the company, headquartered in Burnsville, under its rebranded name along with 10 other employees. The main service offering is RightFax, a network-based fax server solution developed by Canada-based OpenText. The Fax Guys also sell their own service called Fax Ping, which regularly pings a company’s fax line and notifies that company instantly when their server is down.

“We have a product that integrates with VMware, integrates with voice-over IP systems, so we’re not requiring standard analog lines or T1s anymore. It can all be done through existing infrastructure,” Osterdyk says.

The key here is automation, and that is highly valuable for large companies engaged in high-volume fax processes. The Fax Guys’ roster of nearly 600 clients includes names such as Wells Fargo, United Health Group, Medtronic, Cargill, ING, Target and more. Roughly half of revenue comes from product sales, with the other half coming from support and maintenance.

While Osterdyk admits that fax services are harder sell now than they were 10 years ago, his company continues to thrive, with similarly strong sales here in 2012 after last year’s windfall.

He’s not ready to stop growing either.

“We’re actively looking to double the company in the next three years, and we’re shooting for a $10 million company,” he says, identifying acquisition and organic growth as the avenues to reach this goal. “We know where we’re going, now it’s really just a matter of executing the plan that we’ve got determined.”