A GXS INSIGHTS ARTICLE
VAN Service Providers—The Past 10 Years
A GXS Insights Article
By Marco de Vries, GXS Director of Market Intelligence
Vans—you either love ‘em or hate ‘em on the highway.
And you love ‘em or hate ‘em in the information super-
highway. The perception of vans—whether automobiles
transporting troops of kids between soccer games or
value-added networks (VANs) transporting electronic
documents between trading partners—is wide, varied
and often misunderstood. But as with most technologies,
VANs have needed to evolve and adapt to remain rele-
vant. They have evolved significantly from the mainframe
time-sharing days of the 1960s to essential, cloud-based
business platforms for reducing cost, maximizing custom-
er service and boosting top-line results.
One of the most dramatic changes in the VAN market
within the past 10 years has been to the service provider
landscape. The segment has been marked by spin-offs,
buy-outs, partnerships, mergers and acquisitions. While
some companies hastily exited the VAN segment others
were clamoring to get in. In fact, some vendors came
back in after they had exited. The EDI VAN market has
seen new entrants, such as Internet-based players and
IT mega-vendors, who are aligning their business models
with a services-based strategy in the face of recent shifts
toward Software-as-a-Service (SaaS) and Cloud Comput-
ing paradigms. For a mature, 50-year-old segment, the
VAN competitive landscape has been anything but stag-
nant or predictable.
Telecommunications Providers Hang Up
and Redial
In days past of large, centralized telecommunications service
providers, VANs were a critical part of the product line-up.
As the telecom segment deregulated and encountered greater
levels of competition, most providers sold off their VANs in
order to focus on core competencies. For example:
• MCI spun out its VAN to form nuBridges
• Former AT&T spun off its VAN to form the former
EasyLink
• British Telecom (BT) announced it would shut down
its EDI*Net service
It seemed like a mass exodus that foreshadowed the fate of
the industry, but nothing could have been further from the
truth.
While many telecom providers had exited the VAN busi-
ness, others were anxious to get in. Oddly enough, frequently
these were the same companies who had just left. AT&T
sold off its VAN, but was subsequently merged with SBC
Communications which acquired Sterling Commerce. SBC
assumed the target’s name, making AT&T a leading player
in the VAN market again. MCI sold its VAN to nuBridges.
MCI was then merged with Verizon, which later partnered
with GXS for B2B e-commerce services.
IT Software and Service Providers
Reboot their VANs
A similar pattern was observed in the IT services and
software segment. For example:
• GE spun out its VAN to form GXS
• IBM sold off its VAN to private equity firm
Francisco Partners, who subsequently merged
it with its asset GXS
• Peregrine sold off its Harbinger and Extricity
B2B assets to form Inovis, who later acquired
the QRS retail VAN
Much like the telecommunications sector, many IT service
and software providers had exited the VAN business, while
others were anxious to get in. Frequently the new entrants
were the same companies who had just left. IBM sold off
its VAN and only months later acquired B2B integration
services company Viacore, and more recently partnered with
Hubspan to create a joint B2B integration as a service offer-
ing called WebSpan. Microsoft pulled the plug on its Micro-
 2 • VAN Service Providers—The Past 10 Years

A GXS Insights Article

soft Business Network (MBN) service in 2005 and shortly
thereafter partnered with GXS for a B2B services offering for
its BizTalk Server community.
However, not all new investments in the VAN segment
were made by re-entrants. In some cases, the VAN market
attracted new players. For example, ERP leaders have been
moving into the integration services space via VANs. SAP has
invested resources in Crossgate to extend its NetWeaver plat-
form and Oracle just announced a partnership with E2open
for a transportation business process network.
The juxtaposition of vendors selling off their VAN assets
and others trying hard to get back into the game is a strong
reflection of the evolution of the segment. The old VAN that
simply moved data has gone. The evolved VAN that enables
collaborative business process networks has thrived.
The dot.com bubble introduced B2B e-marketplaces tar-
geted at specific industry or user communities. Prominent
marketplaces included Covisint, ENX and SupplyOn in the
Automotive space, WWRE (now Agentrics) in the Retail in-
dustry, Transora (now GS1/1SYNC in the US) for consumer
products, E2open in High-Tech and many others. The mar-
ketplace model has generally been heralded as a failure. Many
e-marketplaces failed due to the inherent closed-community
practices and non-neutral, conflicting interests; however, a
handful survived in an adapted form to continue providing
B2B integration services as alternatives to the VAN.
Additional dynamics have changed the provider landscape
over the past decade. The Internet introduced several new
competitors. First, the idea that B2B exchange was now
“free” gave rise to more robust in-house tools for point-to-
point integration over open systems. Studies confirm they
are arguably anything but free. Second, new Internet-based
VANs came into play, such as Internet Commerce Corpora-
tion (ICC), who later acquired EasyLink and assumed the
EasyLink name. Third, several B2B network providers have
emerged over the past 10 years to support specific business
processes. For example, Ariba for sourcing, OB10 and Xign
(now JP MorganChase) for e-invoicing, TradeCard for global
trade management and supply chain finance. There are many,
many others—with new entrants seemingly arriving on the
scene daily.
Ten years ago, many proclaimed the days of the VAN were
numbered, especially with the Internet and adoption of B2B
e-marketplaces, XML, AS2 and Internet FTP. Even the lead-
ing EDI vendors considered the word “VAN” taboo. Today,
the VAN has not only adapted to survive, but it is more
relevant and valuable than ever. VANs continue to be critical
enablers of supply chains by both supporting cost reduction
and revenue growth. The VAN has lived up to its name in
the past 10 years and will likely continue to play a strong
role for the next. And yes, the minivans will survive as well.
I, once reluctant, now happily drive one myself. The physi-
cal distance it puts between my children alone is significant
value-add.
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