What makes a VAN, could you start a new VAN? Even if you wanted to?

So, what is or what makes a VAN?

The VAN and electronic commerce messaging industry in general, has been a stable and stodgy sector. B2B services organizations have seen little evolution or innovation in the last decade. VAN services are priced and operated unlike other flat rate IP services. It makes one wonder why the premier IP data networks don’t just preempt the legacy and take over the VAN messaging business. If they wanted to, or if you wanted to, could you? What does it take to operate as a VAN, or more accurately, an electronic commerce messaging system?

I’ll tell you what, lets play a mind game, and strip out all the vertical stuff – the translators, software, and consulting, and just leave the communications, what have we then? Read on friends:

Messaging that predates the Internet.

A VAN, stripped of its fru-fru, has three attributes that something like email does not:

1) Established Routes for machine to machine commerce

2) Reliability

3) Reputation (sort of, but not quite what you think)

Acquisition of Routes

Electronic Commerce B2B communications providers (ECCPs) who specialize in (un-bundled QID) routing services, offer what is essentially a private messaging system where identities and routes are manually curated. Systems such as ECGrid® may have some enhanced automation, but such services are solely enhancements on top of basic ISA segment routing. VANs and ECCPs who outsource routes to ECGrid-Like systems gain operational enhancements. Otherwise, VANs and ECCP’s are manual or semiautomated routing systems that deliver EDI messages to machines, mostly.

VANs Cooperate…..Mostly. If you want to operate as a VAN, you must curate a routes table that is made up no more nor less that the inbound and outbound routes required by your customers. Opting in to the collegial network of VANs is completely unlike operating an email system, where routes are propagated autonomously. Although the overhead to provide interconnections to exchange peer traffic with fellow VANs has certain entry level technical requirements (support of X12.56 mailbag protocol), the real itch that needs scratching is the threshold of entry problem.

Newcomers in the business of B2B ECCP must broker agreements with at least a certain subset, or critical mass of established VANs. Accomplishing this as a paying peer can be a daunting and costly task. To attain non-settlement status is even more difficult. The combination of longevity in the market, dues paying, and operating with accounts of distinction on the client roster can just be a long road. Loren Data Corp was founded in 1987, started ECGrid in 2001, and is a non-settlement peer to every VAN save one bad actor who is currently under scrutiny by Uncle Sam.

Need them routes, need that rolodex, and ops staff, and all, The time to get these packed together can be too long in a B2B economy where the move to on-demand services will require more ECCPs with specialized competencies. And speed, you need speed – what if you need to acquire the attributes of a VAN, without having to resort to the startup barriers, or availing yourself of standard VAN mailbox services that simply do not provide the transparency or account control of a primary communications provider. Ponder that.


Of course we refer to the reliability of message delivery. But wait, there’s more. Operating an EDI messaging reliability infrastructure has certain, not-off-the-shelf attributes of other async message queuing and  delivery services. One that springs to mind is X12.56, the wrapper protocol that allows cooperating VANs and ECCPs to communicate inter-network message signaling functions. There is currently no commercial off the shelf X12.56 stack or foundation component for enabling X12.56 – it must be hand-rolled and certified by the “brotherhood”.

The other even more important, (in my opinion) attribute of reliability is the operational fitness for intended purposes aspect. Huh? How your service interfaces and ‘handles’, if you will,  is a component of  system reliability. If you run a very sophisticated B2B SAAS logistics hub, and you need what a VAN can provide – Routes etc.- how does fitness of a VANs or ECCPs account management figure in the equation?

Example: Your multi-million dollar SAAS platform controls logistics for 10k users, and needs just the EDI communications services to connect to your tentants trading partners, nothing else. You are providing on demand services that old industry VANs and Logistics companies previously sold for high six and seven figures. They don’t want you. They will serve you at a price, High KC’s etc. Quite the conundrum, with more pain to come.

The ability to control any EDI network is severely limited with contemporary VANs; hands off account creation and all manner of user role-based management is accomplished via phone calls, web forms, email, and fax for G-d’s sake. Your tenants may not create new EDI account identities, user roles, special connections of messages to named processes or users. All of this is on your plate,  code and all in the DMZ, server side. What a mess. Can’t we do better? (Yes).

This typeof disconnected account management degrades reliability, because severing a user’s administrative needs from control of the EDI network leads to errors, and unnecessary operational overhead that confounds us when trying to implement automated error handling . One quickie example: If you use most VANs the lack of an ability to dynamically create accounts and roles leads to a flat message space, where the only distinguishing factor of the stream is the ISA segment. On a self-service platform with thousands of users, the communications and recovery of that error would be child’s play if the user account space was appropriately segmented and mapped to the user, mailbox account,  trading partner interconnection metadata, etc.

What  you get is exactly none of that control today. (Well, you are here, aren’t you?)


I am not speaking about reputation as regards client recruitment, but rather a type of accumulated credibility to get things off the ground in the EDI world.  One can attempt to buy credibility, buy in with capital, partnerships, etc….but we know that beyond the supply chains of major enterprises, the mapping tools mafia (joke guys joke!), there is an fast approaching era of innovation come upon us. Enterprise 2.0 and the mid market’s desire to exploit the best attributes of  EDI systems without the legacy drawbacks, is what I’m talking about.

Are you an innovator? Can you act in the ASC X12 or similar communities to bring technically creative things to the market? Can one expand the entire industry franchise with more open systems, all routes availability, easier entry, and greater interoperability? Can you still work with the big boyzzzz, the old VANs?  How about the new, upstart cloud based commerce systems providers? Can you move fast and with assurance?

The ability to innovate like 2.0 while operating credibly is an attribute of Reputation that is hard to purchase. But you can work with the folks who have the tools…always. Why? Because the innovators can smell each other, they speak the same language, and act with integrity.

Our market is now in a historically significant period. Things are going to be changing, big time. Now is the time for men and women of good character in the B2B services market to come to the aid of their industry. Stay tuned brothers and sisters.

Tags: , , ,

Comments are closed.