The rich history of value-added networks in EDI connectivity

The 1980s and 1990s can be thought of as the era where electronic data interchange (EDI) really took off. The rise of computerization made EDI a core part of large volume data transmissions in the 1980s, with automotive companies like Ford Motor Co. and General Motors Corporation mandating their suppliers use EDI.

By the early 1990s, the use of EDI had become the standard across all types of industries, with an estimated 12,000 U.S. businesses adopting its use. Rooted in the history of the rise of EDI connectivity is the value-added network (VAN).

See also: What is a B2B/EDI VAN?

How value-added networks fit into the EDI conversation

Functioning much like a mailbox, a VAN is a private business network that enables the secure exchange and delivery of electronic data and documents between business partners. Broken down into more detail, an EDI VAN transaction looks like this:

1. A company sends an EDI transaction to a receiver’s VAN mailbox via a proprietary protocol (originally through dial-up).
2. The transaction is picked up.
3. A response to the EDI transaction is sent if needed.

What the early days of EDI VAN looked like

In the 1980s — the VANs era, as we’ll affectionately call it — large retailers and OEMs led the pack in EDI VAN use, with some even mandating that their smaller partners and suppliers use a specific VAN for EDI communications.

Even as the footprint of value-added networks grew across larger organizations (or so-called “hubs”), there were still obstacles. With the use of dial-up, completing an EDI VAN transaction was a slow-moving process.

But it wasn’t just the speed of the transaction that was an issue; it was also the cost. In combination with an expensive implementation process, the pricing for VAN was based on kilo-characters (KCs), at a cost upwards of $0.50 per KC at certain times.

Internet advancements open the door to alternatives

As the Internet matured in the early 2000s, it gave way to new protocols that could be used to transport business data, and more specifically for EDI transactions. HTTP, SFTP, and AS2 (and later AS4 as well) all gave companies a means to connect point-to-point with their partners without having to depend on costly VAN usage.

While a workaround from a cost standpoint, the rise of these new Internet protocols made partner networks more complex to manage. Not only did businesses need to create an infrastructure to support these various protocols, but they also had to maintain hundreds or sometimes thousands of separate connections.

There was often good reason for this complexity – for example, businesses gain the agility to customize their B2B integration processes – but the cost saved on value-added network usage was overshadowed by the cost of bringing in more manpower to oversee the complexity of managing partner networks.

With consideration to both sides of the coin, larger subsets of partner organizations continued to use VAN within a hybrid connection environment — one that included point-to-point, procurement networks, e-invoicing networks, and as noted, VANs.

As we fast forward to the late 2000s and early 2010s, the conversation shifts to the integration of business processes. Realizing the benefits of digitizing their B2B communications and supply chains, the B2B market sought for more digitization capabilities — and with that demand came new solutions, such as Ariba as a procurement network and PEPPOL as an e-invoicing solution.

Amid all of this, the complexity of the data transmission infrastructure only continued to grow, with all different types of integration participants in the picture.

Entering the age of business integration platforms

Since 2020, the focus has been on finding ways to consolidate the B2B integration sprawl and make managing the exchange of electronic data and documents less complicated. That’s where business integration platforms enter the picture.

While reducing the sprawl of managing multiple vendors, these platforms also fill the gap in expertise of managing value-added networks. With the expertise that built and maintained the complex infrastructure phasing out of the business, companies have been ready to offload this work.

All the while, with partner onboarding being paramount, these pre-connected transaction processing networks created more value for businesses while benefiting from point-to-point integration at the same time.

See also: Why the timing has never been better to consolidate to a single EDI/VAN vendor.

Axway’s B2B Integration platform includes modern API-enabled VAN

Recognizing that many Axway customers still use value-added networks, we are introducing a new VAN service: Axway Business Network. This API-driven cloud SaaS service gives a dedicated VAN mailbox to our customers while providing access to 200 interconnections with VANs and Private Networks.

With a single VAN certificate needed versus hundreds of point-to-point connections and no need to take care of firewall changes or perform technical connection tests, our VAN solution reduces complexities and costs while ensuring consistent communications. (See it in action with a demo here.)

And by adding this new VAN service to Axway B2B Integration, we can provide customers with the flexibility to choose either point-to-point EDI or VAN connection for the most efficient integration with any partner.