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Appterra is the only Collaborative Commerce Platform designed for the cloud.

Your VAN is Robbing You

“The facts are today’s VANs are overcharging

their clients. The notion of a high rate for “Kilo-

Character” fees, monthly minimums and overage

fees are outrageous in today’s modern technical

marketplace.” – Charlie Alsmiller, CEO Appterra,

Inc.

Stop the Insanity. Fire your VAN today.

The 1980s saw Value-Added Networks (VANs) emerge as a

powerful B2B supply chain communication tool. Because–

constant mergers and monopolies aside–the telecommunications

market was extremely heterogeneous, and infrastructures varied

from industry-to-industry, location-to-location, VANs served as

intermediaries who offered “user defined networks:” connectivity

between management, suppliers and other key players in the

chain that needed to be in the communication loop. This

prefigured the current use of email and the Internet as the IT

infrastructure of most businesses. VANs offered store-and-forward

mailboxes that provided protocol conversion and secure delivery of

standardized structured data. The use of structured data, as

opposed to unstructured text like that in today’s email, resulted in

a co-development with EDI sets.

Most VANs were costly, priced outside of the reach of most

businesses that still relied on a multitude of (highly inefficient and

human error prone) paper-recording and communication

technologies. An interesting twist to this is that, though larger

highly-capitalized firms were able to invest in the VAN

infrastructure and often exorbitant transaction costs for maintaining

their EDIs, they often had to continue to maintain paper-based

data processes in order to work with smaller companies who were

unable to move their data systems over from paper.

This duplication of systems undermined the function if not the

allure of VANs.

Then came the Internet. Accessible standards like ebXML saw

Web services network (WSN) take on much of the duties that EDI

users would look to VANs to perform. Future prospects for VANs,

it seemed, were incredibly bleak.

But, alas, Internet B2B transaction never did quite defeat the

eternal boogeymen of dependability and security, as the B2B

system involves inter-firm communication between the secure

firewalls that tame the internet, often on completely different IT

infrastructure. This is how VANs defended market share: by

focusing on specific vertical industries that put a premium on

security. By expanding the services they offer and further

developing Transaction Delivery Networks (TDN) that provide

secure end-to-end management of electronic communications,

VANs have been made market gains in healthcare, retail and

manufacturing and other high security, often data-centralized

industries. Thus, rather than connecting firms with the great big

world, VANs focused on their market corner, intra-firm

communication, and stayed in the game.

February 23, 2014