Think of it this way.

Some days, you have customer meetings. Other days, you don't. Some have two people, some have two dozen.

If you have frequent luncheon meetings, you could maintain a kitchen and staff for those times when you feed a lot of employees and guests; or, you could order luncheon platters as needed from the local deli and pay only for the food you actually need.

Similarly, instead of buying fax machines or costly servers built to handle the maximum anticipated traffic (and otherwise being a wasted resource when not used to full capacity), you can order out ("outsource") your faxing to a service with capacity that scales in real time based on your immediate need.