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Apply HN: IXD – Universal Broker for Legacy Communications Systems

10 points by farmdog ↗ HN
The fax market is still growing by around 10% a year in terms of usage and revenue. Hospitals, insurance, banks, lawyers, and government all rely on fax as a universal form of communication between their systems when they send significant amounts of sensitive information with other entities in an automated way.

This is crazy.

IXD aims to replace fax and other legacy communications technology with 15 minutes worth of changes to their infrastructure. Companies like DocuSign don't focus on bulk transmission of data, and no other solution out there really provides the universal connectivity fax provides. And e-mail is simply not secure. GPG is too hard to use or isn't auditable, so companies stick with what works for them

We're working on clients, proxies, and APIs that pull data from legacy systems and understand fax protocols, and send them through our servers, where we then can relay that data to its destination in a secure way. Then the receiver can choose how they want to receive those documents: via fax servers, e-mail, a Web page, into their database, or in a network folder, for example. Imagine sending a document to a government agency without needing to find a fax machine, all while the agency keeps their fax machines in place and receives your document the way they are used to.

In the long-run, we want to enable large enterprises that deal with compliance standards to use faster, more modern technology to communicate with each other so each company chooses how they want to receive information such as documents or medical images, for instance. This means connecting different communications services: Like Dropbox to ShareFile; or DocuSign to SharePoint. No longer do people have to use the system the sender used to send information: Everyone can use the service they are comfortable with, and more importantly, have audit records in.

4 comments

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trusheim
Quick questions: Is the fax market really growing at 10%+ per year? Who are the customers and how large is that market? Why are those customers "left behind" from the wave of innovation that transmits more and more data electronically?
farmdog
Is fax really growing?: My background is real-time communications (voip, video, messaging) so this was not intuitive for me. eFax's latest quarterly report indicates they grew their fax division by 5%; the hospitals many of our partners server have growth at 15-20% in terms of revenue and usage. In fact, our partners tell us this past year was their best in the past 20 both in terms of revenue and usage. Anecdotally, one hospital network we just talked to does it in house and is increasing the number of phone lines to their servers from 64 to 144. But the real source for this number is from Davidson Consulting's annual fax report: http://davidsonconsultinginc.com. Relevant summary is at https://www.biscom.com/blog/fax-server-industry-news-from-da.... They cite 9.4% growth; our number comes from our focus on healthcare where we source from our partners' growth, as well.

Who are the Customers/Market Size: We are focusing on healthcare because they have strong incentive to send data faster, but key segments also include legal, government, insurance, and finance/banks. The main driver for them is compliance (HIPAA, Sarbanes-Oxley, FINRA regulations, etc) that effectively require companies to secure their communications and keep an audit trail of access/communications. Audit trail and interoperability are the main reasons companies keep fax around because it's a least common denominator when it comes to communications. The entire secure document collaboration market (including SharePoint and Dropbox) is around US$11.5B right now; the fax market is $5B of that. Telephone costs are $1.3B of that.

Why are these customers left behind: 1: It's hard to completely change out a huge system that is transmitting millions of pages of data every day and many secure document products like DocuSign aren't designed to send at scale like some of the banks use (eg, one bank does 40M pages/month).

2: Beyond the phone number system, there's no universal registrar for contact information for each company. So if company A wants to send something to company B, and both are highly regulated, if company A uses Dropbox and company B uses SharePoint for their audit trail, then how do the two talk to each other? Fax is universal and has a well-known protocol/lookup system and it keeps their audit trail in one place. It's just old, slow, and expensive (but cheaper than building custom integrations between every sender and receiver). I'll bet most people have experience receiving secure documents or signing with at least 10 different systems. If you had to receive more than 1000 documents a month, it would be really hard to do that with 10 different systems: You'd want to just use one, especially for record keeping.

asantiago
Based on a 10% grow year to year is there some information on what will be the cost savings for those companies when adopting this system?
farmdog
Effectively, these companies either pay someone to host a fax service with copper (not IP) phone lines or do that on their own with a fax server and a number of phone lines depending on how much they are sending/receiving. They spend on IT to manage their operations, server and licensing fees for the fax software, hardware (fax boards or phone gateway routers), and phone lines. The lowest cost we've seen at scale a bank that sends 40M pages per month and spends about 1.5 US cents per page. All costs in this market are tied to page. That ends up being around $600/GB of data.

Cost to us is a fraction of the cost because we rely on the Internet, but fax users care more about speed and error rates. Today, fax takes best case 45s/page (this is at 33.6 kbps), but there are errors and retransmissions that slow this down. Our solution knows how to get data from the fax servers and back-end applications faster than fax speed on the order of 10-100mbps, so our value proposition is that we speed up their infrastructure and replace phone lines. To help us grow, we charge them about 50% of their telephone line costs because those lines are no longer needed. So in short, the major value is the speed and error rate reduction, so significant cost cuts are not necessary, but helpful for growth.