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Lose the Old VAN

 
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“The facts are today’s VANs are overcharging their clients.   The notion of a high rate for “Kilo-Character” fees, monthly minimums and overage fees are outrageous in today’s modern technical marketplace.”  – Charlie Alsmiller, CEO Appterra, Inc.

Stop the Insanity.  Fire your VAN today.

The 1980s saw Value-Added Networks (VANs) emerge as a powerful B2B supply chain communication tool. Because– constant mergers and monopolies aside–the telecommunications market was extremely heterogeneous, and infrastructures varied from industry-to-industry, location-to-location, VANs served as intermediaries who offered “user defined networks:” connectivity between management, suppliers and other key players in the chain that needed to be in the communication loop. This prefigured the current use of email and the Internet as the IT infrastructure of most businesses. VANs offered store-and-forward mailboxes that provided protocol conversion and secure delivery of standardized structured data. The use of structured data, as opposed to unstructured text like that in today’s email, resulted in a co-development with EDI sets.

Most VANs were costly, priced outside of the reach of most businesses that still relied on a multitude of (highly inefficient and human error prone) paper-recording and communication technologies. An interesting twist to this is that, though larger highly-capitalized firms were able to invest in the VAN infrastructure and often exorbitant transaction costs for maintaining their EDIs, they often had to continue to maintain paper-based data processes in order to work with smaller companies who were unable to move their data systems over from paper. This duplication of systems undermined the function if not the allure of VANs.

Then came the Internet. Accessible standards like ebXML saw Web services network (WSN) take on much of the duties that EDI users would look to VANs to perform. Future prospects for VANs, it seemed, were incredibly bleak.

But, alas, Internet B2B transaction never did quite defeat the eternal boogeymen of dependability and security, as the B2B system involves inter-firm communication between the secure firewalls that tame the internet, often on completely different IT infrastructure. This is how VANs defended market share: by focusing on specific vertical industries that put a premium on security. By expanding the services they offer and further developing Transaction Delivery Networks (TDN) that provide secure end-to-end management of electronic communications, VANs have been made market gains in healthcare, retail and manufacturing and other high security, often data-centralized industries. Thus, rather than connecting firms with the great big world, VANs focused on their market corner, intra-firm communication, and stayed in the game.

Charlie Alsmiller

Throughout his career, Charlie Alsmiller has focused on customer problems in difficult industries such as Energy and Telecommunications. Prior to starting Appterra in 2005, Alsmiller was VP of Global Operations for Allegro Development, a leading provider of software for the energy sector. He has also served as president of OmniSpace Technologies, a leading SaaS provider that he founded in 1999. He spent over 10 years in the consulting world with Price Waterhouse and Deloitte Consulting, where he participated in a wide variety of projects for very high profile clients. Mr. Alsmiller holds a BBA from Baylor University in Management and Information Systems and a MBA from the University of Dallas in International Business. Specialties: Technology ventures, Enterprise Software, Contract Negotiation, International Operations, Private Equity, Product Management, Strategic Alliances, Software Implementation, Software Development

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