Value-Added Network (VAN)

AAA

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.

INVESTOPEDIA EXPLAINS '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. Supply Chain Management - SCM

    Supply chain management is the streamlining of a business' supply-side ...
  4. Business To Business - B To B

    A type of commerce transaction that exists between businesses, ...
  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 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. 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 >>
  3. 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 >>
Related Articles
  1. Investing Basics

    These Four Industries Must Change to Survive

    Tech innovations from new companies are threatening long-time industry stalwarts in transportation, hospitality and finance.
  2. Professionals

    Is a Google Robo-Advisor on the Horizon?

    It's possible that Google is looking to get into the robo-advisor business, either as a new venture or as a way to provide more benefits to employees.
  3. Stock Analysis

    Smartphone "Flagship Killers" Coming after Apple and Samsung

    Learn why flagship killers such as OnePlus and Xiaomi have the potential to become the first legitimate competition faced by Apple and Samsung.
  4. Professionals

    Are These the 10 Best Stocks in the World?

    Most of the top 10 stocks in the world have performed exceptionally well over the past several years. Here's a look at their future prospects.
  5. Stock Analysis

    Where Does Yahoo (YHOO) Go From Here?

    Yahoo operates in a competitive environment, but if it makes the right deals there's no reason why it can't thrive.
  6. Personal Finance

    Can Mobileye Revolutionize The Car Industry?

    Cars are evolving into vehicles connected to the ecosystem around us. With its ability to sense and detect objects around a car, Mobileye's technology is making that connected ecosystem possible.
  7. Professionals

    Tips on How Financial Advisors Can Go Paperless

    Going paperless may seem daunting for some advisors, but new software and hardware technologies are making it easier every day.
  8. Stock Analysis

    Is Apple's (AAPL) Selloff Justifiable or Panic?

    Apple has minted millionaires over the past decade, but there is one current risk that might soon bring this to an end at least temporarily.
  9. Professionals

    Why Robo-Advisors Need to Grow Up

    The main players in the robo-advisor space need to act more human. Here's why.
  10. Entrepreneurship

    10 Richest, Most Successful Tech Geniuses

    Unlike many industries, tech billionaires are mostly self-made. Many of these billionaires came from humble means and, through their own genius, changed the world.

You May Also Like

Hot Definitions
  1. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  2. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  3. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  4. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  5. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  6. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!