Value-added network

A Value-added Network (VAN) is a hosted service offering that acts as an intermediary between business partners sharing standards based or proprietary data via shared Business Processes. The offered service is referred to as "Value-added Network Service".

Technical Definition

VANs traditionally transmitted data formatted as Electronic Data Interchange but increasingly they also transmit data formatted as XML or in more specific "binary" formats. VANs usually service a given vertical or industry and provide "Value Added Network Services" ("VAN Services" or VANSs) such as data transformation between formats (EDI-to-XML, EDI-to-EDI, etc.).

At one extreme, a VAN hosts only horizontal Business-to-business application integration services, hosting general-purpose integration services for any process or industry. At the other extreme a VAN also hosts process-specific or industry-specific integration, for example supply chain ordering or data synchronization services.

A VAN not only transports (receives, stores and forwards) messages but also adds audit information to them and modifies the data in the process of automatic error detection and correction or conversion between communications protocols).

History

1960s: Timesharing and network services

Following in the wake of Timesharing providers, provision of leased lines between terminals and datacenters proved a sustainable business which led to the establishment of dedicated business units and companies specialized in the management and marketing of such network services. See Tymshare for an example of a timeshare services company that spun off Tymnet as a data communications specialist with a complex product portfolio.

1970s: Marketisation of telecommunication

The large-scale allocation of network services by private companies was in conflict with state-controlled telecommunications sector. To be able to gain a license for telecommunication service provision to customers, a private business had to "add value" to the communications line in order to be a distinguishable service. Therefore, the notion of "Value-added Network Services" was established to allow for operation of such private businesses as an exemption from state control.

The telco sector was marketised in the USA in 1982 (see Modification of Final Judgment) and in the United Kingdom starting with the early 1980s (manily due to the privatization of the British Telecom under P.M. Margaret Thatcher). In the later 1980s, running a "Value-Added Network Service" required licensing in the U.K. while "VAN" had merely become a functional description of a specific subset of networked data communication in the USA, as stated in.^[1]

Since 1980s: International competition and standardisation efforts

On a multinational scale, due to the heterogeneous telecommunication economy and infrastructure before the market penetration of the Internet, management of a VAN Service proved a complicated task leading to the idea of "user defined networks",^[2] a concept preceding the nowadays ubiquitous availability of internet service. Standardization efforts for data networking were made by ITU-T (former CCIT) and included X.25 (Packet Switched Network) and X.400 (Message Handling Systems), specifically motivated by an emerging transatlantic competition^[3] in the early 1990s.

Perspective

In the absence of state-operated telecommunication sector, "Value-added Network Service" still is used, mainly as a functional description, in conjunction with dedicated leased lines for B2B communications (especially for EDIFACT data transfer).

Governments like South Africa still maintain explicit regulation^[4] while others address specific services with licensing.^[5]

Traditionally, most VANs primarily only supported general-purpose B2B integration capabilities focused on EDI but service providers are evolving to become more process- and industry-specific over time, particularly in industries such as retail and hi-tech manufacturing. Some sources (^[6]) suggest that modern VANs should be called "Trading Grids" due to commonalities with Grid computing. Others, such as^[7] distinguish into "Internet Service Providers" (ISPs) and "International Value-Added Network Services" (IVANS) operators.

See also

• Electronic Data Interchange#Value Added Networks
• Time Sharing
• Amtrix

References