Collaboration brings value to VAN clouds

Value-added networks languished in the late 1990s, but new technologies have revitalized them, attracting businesses

Maybe Gartner Vice President of Research Benoit Lheureux can't say, "I've seen the best minds of my generation destroyed by madness, starving hysterical naked," but he did sound a bit like the poet Allen Ginsberg when -- speaking about VAN (value-added network) service providers -- he said, "I saw these guys sink into the morass of the IT hell hole, and they were bleeding revenue."

That was back in the late '90s and early 2000s when all VANs did was run an EDI mailbox application on a mainframe bolted to a whole bunch of racks of modems and communications servers. As a result, C-level execs began bolting.

"It was a train wreck," Lheureux said.

VANs can do more than pedestrian EDI transfer

Since then there has been a fundamental change.

VANs have modernized their services, hardened their datacenters, and added a lot more functionality to the stack.

Although, as Lheureux says, "there is still money to be made doing pedestrian EDI transfer," five years ago VANs never saw it as their job to correlate b-to-b transaction documents such as POs, ASNs (advance shipment notices), and invoices. But increasingly, savvy customers -- aware of the unused potential sitting inside VAN technology -- are asking VANs to do just that. The result is that companies that are alert to the changes taking place in this segment of the industry now use VAN services to give all members of the community a shared view of the state of the process.

Five years ago, Lheureux says, everyone in the community argued the facts about what happened. Now they no longer have to argue. Instead, if there is a problem, the interested parties can discuss how to solve it.

This shift to resolving problems through collaboration is something Phil Smith, vice president of global network product lines at VAN service provider Sterling Commerce, sees as well.

"People are coming to us who say they want us to support them and their vendors so things occur the way they are supposed to occur," Smith says.

The retailer or the manufacturer can say to the supplier, "You were supposed to send me an ASN, and you didn't. Let's fix the problem."

As VANs morph, we are now witnessing traditional VAN vendors such as E2open, GSX, Hubspan, Inovis, and Sterling Commerce providing visibility on top of the flow of transactions. And this is what is hot right now, creating a new, collaborative community.

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