Solution 1:

Hylafax is worth looking at - it's a client/server solution so you do need to set it up on a server, but then you can use it with windows clients.

It's a very robust, full featured open source faxing and fax handling/routing system - so it may be overkill, but it should give you more ability to expand later at a lower cost than outside services.

-Adam

Solution 2:

I have had great results with a commercial product called GFI FaxMaker, using an old 56K fax/modem plugged into a spare server, installed GFI FaxMaker on that server, and configured the fax driver as a network print queue. FaxMaker has the ability to split a single print job into multiple faxes based on text keywords - e.g. every time it sees the line

Fax: 020 1234 1234

it'll finish the previous transmission, split the document, send the current page to the appropriate fax number, and so on.

We just set up an MS Access report that took about 15 minutes to put together and then printed the whole thing - 600+ pages - to the network print->fax queue, which split it into 300 individual faxes and sent them via the fax/modem.