Value-Added Network (VAN)

DEFINITION of 'Value-Added Network (VAN)'

A private network provider hired by a company to facilitate electronic data interchange (EDI) and/or provide other network services such as message encryption, secure email and management reporting. A Value-Added Network (VAN) simplifies the communications process by reducing the number of parties with which a company needs to communicate. The VAN accomplishes this by acting as an intermediary between business partners that share standards based or proprietary data. VANs may be operated by large companies for efficient supply chain management with their suppliers, or by industry consortiums or telcos.

BREAKING DOWN 'Value-Added Network (VAN)'

VANs usually operate in a mailbox setting, wherein a company sends a transaction to a VAN and the VAN places it in the receiver's mailbox. The receiver contacts the VAN and picks up the transaction, and then sends a transaction of its own. The system is similar to email, except that it is used for standardized structured data rather than unstructured text.

The ubiquity of the internet has lessened the attraction of VANs, largely due to cost considerations, since it is much more cost-effective to move data over the internet than to pay the minimum monthly fees and per-character charges included in typical VAN contracts. VANs have countered the challenge from the internet by focusing on specific industry verticals such as healthcare, retail and manufacturing, and by expanding the range of services they offer customers.

RELATED TERMS
  1. Electronic Commerce - ecommerce

    A type of business model, or segment of a larger business model, ...
  2. Interchange

    A transfer of information from one computer to another electronically. ...
  3. Business To Business - B To B

    A type of commerce transaction that exists between businesses, ...
  4. Supply Chain Management - SCM

    Supply chain management is the streamlining of a business' supply-side ...
  5. Supply Chain

    The network created amongst different companies producing, handling ...
  6. Quick Response (QR) Code

    A type of bar code which can be read by a digital device, and ...
Related Articles
  1. Investing

    5 Up and Coming Social Media Startups

    Although the days of Facebook's dominance aren't close to being over, here are some new creative platforms gaining traction on the worldwide web.
  2. Investing

    Why Does Amazon Let Its Competitors Use AWS? (AMZN,NFLX)

    Amazon allows dozens of its competitors use AWS. Is this a strategy to earn revenue or something more?
  3. Investing

    Cybersecurity Startups Are an Emerging Trend

    As cybersecurity spending across both government and private sectors continues to increase amid rising concern of security threats, the potential for cybersecurity startups has never been greater. ...
  4. Stock Analysis

    Top 5 Companies Owned By Microsoft (MSFT)

    Find out about Microsoft's most newsworthy acquisitions. Microsoft acquired Skype in 2011 to expand its footprint in the online telecommunications sector.
  5. Investing

    What Investors Need to Know About Returns in 2016

    Last year wasn’t a great one for investors seeking solid returns, so here are three things we believe all investors need to know about returns in 2016.
  6. Investing News

    The 4 Most Expensive Company Campuses

    Discover some of the most expensive company campuses in the world, why they are often designed so elaborately, and learn how this affects workers.
  7. Stock Analysis

    The Top 5 Semiconductor Penny Stocks for 2016 (ACLS, CAMT)

    Learn more about the semiconductor industry, and discover five penny stocks that investors seeking exposure to this industry should consider in 2016.
  8. Investing

    The Truth Behind Robo-Advisors

    Robo-advisors are marketed and sold as being more “intelligent” than their human counterparts. But are they actually more intelligent?
  9. Investing

    Drone Investments Are Flying High 

    According to a report released by Dow Jones VentureWire, venture-backed funding for drone companies is on the rise.
  10. Stock Analysis

    4 Reasons To Invest In Motorola Solutions (MSI)

    Discover the rationale behind investing in Motorola Solutions and why the company is poised for growth in the future after its recent spinoff.
RELATED FAQS
  1. How has the Internet impacted Value-Added Network (VAN) providers?

    The advent and proliferation of Internet-based service providers and cloud technology has created an easier, cheaper and ... Read Full Answer >>
  2. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  3. How has investing in the Internet sector evolved over time?

    Investing in the Internet sector has become more conservative over time. It reflects a more measured approach that shies ... Read Full Answer >>
  4. How have technical skills shifted over the past century in the workforce?

    Several changes have transformed the skills required of the modern workforce. The influence of technological change has undoubtedly ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center