AS2, FTP, or VAN: The Race to Zero (Part 2)

With the ever-changing economy, especially now, businesses are looking for ways to reduce costs and become more efficient.  The new technologies (as previously discussed in Part 1 of this blog), coupled with the immediate need for cost cutting, have created the perfect environment to fuel another major shift in business communication.

One factor helping this shift is that technology has been developed and priced so that even small “Mom and Pop” shops can obtain affordable AS2 and/or FTP solutions.  The shift in cost of direct connections will fuel the move away from traditional Value Added Network (VAN) trading partners to having more AS2 and/or FTP partners (connection types).  This shift will increase more rapidly as a result of the constant need for companies to become more efficient to remain competitive.

Large retailers, such as Walmart, require a “direct” AS2 connection to do EDI business. This represents a key indicator that this shift to AS2 (and/or FTP) is becoming more prominent and recognized.

It is interesting to see this relationship go though another major change.  What we’re actually seeing is communications between Trading Partners coming full circle.  Initially there were leased lines and individual modems for connecting to trading partners.  Over time this became too expensive and, out of necessity to reduce communication costs, the VAN was born.  More recently the Internet was introduced, which provided a new and inexpensive means to communicate.  With expanding Internet capabilities, VANs became too expensive and too time consuming to manage.  Better, cheaper software was designed to utilize these new communication methods.  As a result, we now see more direct-connections being established in place of moving data through the traditional VANs.

This shift will require more time…it will not happen overnight.  Instead, it will be a slow migration that will occur over the next decade (possibly longer).  As new business relationships are formed, they will take advantage of these newer technologies; older methods are likely to remain with the VAN service (although the VANs often do provide other solutions and services besides merely the moving of data).  Going forward, implementations will generally see a mix of these connection options until costs and efficiency eventually eliminate those methods that restrict growth.

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