What is VAN?

VAN stands for “Value Added Network”.  A VAN is a data transfer service that uses EDI and/or file transfer protocols to connect to dozens, hundreds or even thousands of businesses.  VANs are often industry-specific; the ones that are will usually connect to almost every major supplier and consumer within that industry (e.g., auto parts).

As a marketing term, VAN is associated with a bygone era.  Most VAN solutions now position themselves as providers of cloud-based EDI and file transfer services (e.g., GXS) or EDI and file transfer technology that completely integrates with modern Community Management services (e.g., IBM’S Sterling Commerce).

However, as a technology concept, VANs are what many “cloud” services hope to be when they grow up: a mature and reliable interconnection of most of the major businesses that serve an industry.

BEST PRACTICE: VANs represent the final and most complete evolution of outsourced technology and services in the file transfer industry.  However, common VAN pricing practices such as “per byte charges” allowed innovative firms like Standard Networks and Tumbleweed Communications to create a new “managed file transfer” space in the early 2000’s.  Managed file transfer technology, even deployed on premises, often provides a significant cost savings over VANs and should be considered by anyone using or thinking of using a VAN service.

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