Digitization The fax is dead, long live the fax

Forget artificial intelligence and big data: In Germany, business is still done by fax. Is it safety or a sign of the country’s digital backwardness?
High tech.

On the outskirts of Munich, a room full of computers supports one of Germany’s most important business technologies. Hundreds of network cables connect massive servers, and elaborate cooling systems hum in every corner.

“For most companies the fax is still indispensable,” says Martin Hager, CEO of Retarus, a cloud fax provider. That’s right — the fax. Up to 9,000 faxes a minute pass through Retarus’s center. And the number of faxes sent in Germany is growing, by about 10 percent per year.

Germany’s companies, large and small, rely on facsimiles to a degree unthinkable elsewhere. Some say faxing’s bizarre afterlife is yet another symbol of Germany’s digital backwardness, its mistrust of innovation, its unadventurous, safety-first mentality. Two-thirds of German companies regularly use faxes, whereas only half of them use video conferencing technologies, and just one-third use messaging services or online collaboration tools.

Fax services arrived in Germany in 1979, courtesy of the postal service. At a time when hand-delivered letters still dominated corporate communications, this was a real step forward: You could transmit a document in moments anywhere in the world and have it automatically printed on receipt. These days, some faxing happens via cloud servers rather than landlines, but the principle remains the same.

The technology is ubiquitous across Germany. Lieferheld, a booming food delivery startup, sends a quarter-million faxes every day to quickly give restaurants their customers' orders. Agro-pharmaceutical giant Bayer sends a localized weather fax to 30,000 farmers every day. Supermarkets, hotel chains, automotive manufacturers and holiday companies all send confirmations by fax. Some law enforcement agencies only accept tip-offs via fax, and medical institutions will only send some data by fax to protect patient information.

Fax speak for themselves

The medium’s champions say it is robust and secure. Users are fond of the receipt confirmation, and spam is rarely a problem. Hackers can make little headway with faxes. But in the German context, the fax’s greatest advantage is a legal one. For banks and insurance companies, faxed documents carry legal weight, but online ones still do not. This is exactly the problem, say critics of the country’s technological timidity.

About 37,000 new fax machines were sold in Germany last year, one-tenth of sales a decade ago. But these days most faxing is done on multifunction devices that are also capable of scanning and printing. Ironically, researchers have been able to penetrate entire networks by sending a malicious fax to an all-in-one printer.

It's unlikely the transmissions will end any time soon. “It’s a German thing,” said a spokesperson for manufacturer Brother. “They like the security of the fax option.” They have no plans to discontinue the function for the German market.

A version of this article appeared in the business weekly Wirtschaftswoche, a sister publication of Handelsblatt Global. To contact the author: [email protected]