The fax machine has been disappearing for years, but faxing isn’t going anywhere.
Physical fax machines tie a required workflow to hardware, an analog phone line, and a single location. That setup costs money to maintain, creates risk when the hardware fails or a line drops, and limits who can send or receive a fax to whoever is standing next to the device.
For organizations in healthcare, legal, finance, and government, faxing isn’t optional. The other side of the transaction requires it. But the machine that made it possible for decades has become the weakest link in the process.
Organizations that still rely on fax have begun stripping the hardware from their workflows. They kept the format and moved everything else into software.
Cloud faxing is easier to evaluate when you understand how it works, where documents are stored and routed, and what to ask before choosing a platform.
What is cloud faxing?
Cloud faxing sends and receives faxes through software over an internet connection instead of through a fax machine and a phone line. The document reaches the other end in the same fax format. The recipient does not need to know that the sender used a cloud service.
Some providers call this virtual faxing or digital faxing. The labels vary. The core idea is the same: the fax format stays, the machine goes.
Cloud faxing works from a desktop, a laptop, or a mobile device. There is no toner, no paper tray, and no dedicated phone line. The user uploads a document, selects a recipient, and sends. Incoming faxes arrive as files in an inbox, a storage folder, or an integrated application.
How cloud faxing works
The path a fax takes depends on what sits on the receiving end. Two models cover most setups:
Internet to fax machine
When the recipient still uses a physical fax machine, the sender’s cloud service converts the document and transmits it using fax over IP (also called T.38 or FoIP). The signal travels over the internet to a gateway, which converts it to an analog signal that the receiving machine can print.
This is how cloud fax services reach legacy endpoints without requiring the other side to change anything.
Internet to internet
When both sides use cloud-based systems, the document stays digital throughout. There is no analog conversion. The sender uploads a file, the service delivers it, and the recipient retrieves it from a portal, email, or integrated application.
This is where online fax drops most of the limitations of the old process: no busy signals, no failed transmissions from a line glitch, and no paper jams.
What makes cloud faxing different from a fax machine
Cloud faxing removes the physical layer from a workflow that still runs on the fax format. The differences show up across hardware, access, and record-keeping. Here’s how:
- No hardware to maintain: There is no machine to service, no toner to replace, and no analog phone line to keep active. The entire send-and-receive process runs through software.
- Send from any device: Users fax from a desktop, laptop, or mobile device over an internet connection instead of walking to a machine in a specific room.
- Automatic transmission records: Every fax is logged with a timestamp, recipient, and delivery status. That creates a searchable audit trail without manual effort.
These are the broad differences. The comparison gets sharper when you directly compare cloud faxing to a traditional fax machine and a standalone fax service side by side.
Where the document lives
This is the part most explainers skip.
A fax has to be stored somewhere after it is sent or received. With a standalone cloud fax service, that location is typically the vendor’s infrastructure. The vendor receives the document, stores it, and gives the organization access through a portal.
That means a third party holds the data. For organizations in regulated industries, this raises questions about jurisdiction, retention, data residency, and who can access the file at rest.
Some setups store faxes directly in the organization’s own environment. One example is storing faxes within a SharePoint tenant tied to the organization’s Microsoft 365 instance. That shifts storage and access control back to the organization and simplifies the compliance posture by keeping documents within the infrastructure that the organization already manages.
Secure faxing is not just about encryption in transit. It is about where the document lands and who controls it after transmission. HHS recognizes fax as a permitted method for sharing protected health information under HIPAA, provided reasonable safeguards are in place. Where and how faxes are stored at rest is one of the safeguards that organizations need to evaluate when choosing a cloud fax platform.
Where cloud faxing fits today
Faxing persists in industries where the other side of the transaction requires it. Healthcare is the most visible example. In a 2019 MGMA poll of 1,581 healthcare leaders, 89% reported that their organizations still used fax machines.
That number has held because the underlying cause has not changed. Electronic health record systems across organizations still cannot reliably exchange documents with one another. Fax fills the gap.
Healthcare isn’t alone. Several other sectors depend on fax for the same structural reasons because regulations require verifiable delivery, the counterparty expects a fax number, or both. Other industries include:
- Legal services: Court filings, signed contracts, and document exchange between firms still run through fax in many jurisdictions.
- Financial services: Loan applications, account documents, and compliance filings often require faxed transmission with a delivery confirmation.
- Government: Federal, state, and local agencies use fax for official filings, inter-agency communication, and constituent records.
- Manufacturing: Purchase orders, quality documents, and supply chain records move by fax between plants, suppliers, and regulators.
The shift across all of these sectors is not away from faxing, but rather a shift away from the machine itself.
Organizations are routing fax workflows through the platforms they already use for voice, messaging, and collaboration. Faxing from inside Microsoft Teams is one example. It reflects a broader move toward bringing fax into a managed communications environment alongside the tools people already work in.
What to look for in a cloud fax setup
Not every cloud fax platform is built the same way. The differences show up in where data lives, how compliance is handled, and how the platform fits into the organization’s existing environment. A few areas are worth evaluating before choosing one, including:
Where documents are stored at rest
Some platforms keep faxes on the vendor’s servers. Others store them in the organization’s own environment, such as SharePoint or a dedicated tenant. The answer shapes the compliance posture and determines who controls the data after delivery.
How compliance requirements are supported
Look for support for HIPAA, SOX, or whatever regulatory framework applies. Ask whether the vendor signs a Business Associate Agreement. Confirm how the platform handles audit trails and retention policies.
How it integrates with existing tools
A cloud fax platform that works inside the tools the team already uses reduces adoption friction. One that requires a separate login, a separate app, and a separate workflow adds it back.
How fax numbers are managed
Existing fax numbers can usually be ported from an analog carrier to a cloud platform. Confirm how the provider handles number provisioning, porting timelines, and assignment across teams or locations.
Once the criteria are clear, moving fax off analog lines and into a platform like Microsoft Teams is a more defined process than most organizations expect.
Drop the fax machine, keep the format
Cloud faxing solves a specific problem. Organizations that need to fax should not need to maintain hardware, analog lines, and a single-location workflow to do it.
The format stays because the other side of the transaction requires it. Everything around the format moves into software.
The right setup removes the machine, keeps the fax number, encrypts the transmission, and stores the document in an environment the organization already controls. It fits into the tools people use instead of running alongside them.
Talk to a Momentum faxing expert about how you can deploy a cloud faxing setup that fits your compliance and storage requirements.
FAQs
Is cloud faxing secure?
Yes, when configured correctly. Security depends on encryption during transmission and where the document is stored after delivery. A platform that encrypts data in transit and stores files within infrastructure that the organization controls provides a stronger posture than one that holds documents on a shared vendor server.
Do I need a fax machine for cloud faxing?
No. Cloud faxing replaces the machine and the analog phone line. Users send and receive faxes from a computer or mobile device through software. The recipient still receives the fax in the standard format, whether they use a machine or a cloud service on their end.
Can I keep my existing fax number?
Yes. Fax numbers can be ported to a cloud fax platform, so partners, patients, and vendors reach the organization at the same number they already have on file. Ask the provider about porting timelines and any technical requirements before starting the process.
What industries use cloud faxing the most?
Healthcare, legal, financial services, and government. These sectors fax because regulations or counterparties require it. Manufacturing is also a significant user, particularly for purchase orders and quality documentation. Cloud faxing removes hardware from the workflow without changing the format the other side expects.
How does cloud faxing work with Microsoft Teams?
A cloud fax solution can integrate directly with Microsoft Teams, allowing users to send and receive faxes from the same platform they use for calls and messages. Microsoft Teams faxing routes the document through the Teams environment and can store it in the organization’s own tenant, keeping the workflow and the data in one place.
