Value-Added Network (VAN)

In the 1970s, private organizations managing large network services competed with state government-controlled telecommunications services. To differentiate from state services, private organizations recognized a driving need to add communication value. This proved complicated and led to the concept of user-defined networks, which preceded Internet service providers (ISPs).

As the Internet developed, many companies found it more cost-effective to transport data via the Internet, rather than incurring minimum monthly fees or per-character charges typical to VAN contracts. VAN providers countered by offering additional services, including secure email, encryption, management reporting and Electronic Data Interchange (EDI) translation between organizations.

VANs are now used in the absence of state-controlled telecommunications. However, the VAN term primarily describes business-to-business (B2B) communications, especially EDI For Administration Commerce and Transport (EDIFACT), which is an international U.N. standard that competes with Extensible Markup Language (XML). VANs continue evolving into more specific industry processes with particular emphasis on retail and high-tech manufacturing.