The Internet popularized instant communications with far-flung computers via the simple click of a mouse. Anyone with a Web browser can follow links and hop from site to site, gleaning information that companies and people have decided to publish. That same point and click access can be used to speed communication and enhance collaboration between a company and its partners and customers.

But what happens when a company needs to share information that is confidential?

That’s where the “extranet” comes in.

What is an extranet

An extranet has the appearance and feel of a website, but adds levels of security to prevent unwanted viewers from clicking through to private data. Similar to an intranet -- a private Internet for people inside a company -- an extranet widens the circle to privileged outsiders.

An extranet can streamline the sharing of information, as well as applications and services. For example, a public relations agency may want to review marketing materials with a client. Rather than e-mail a large file, or fax it, or send it via costly overnight mail, the agency could put the materials on a private website. An extranet. The agency might also want to use this extranet to collaborate with clients, sharing calendars, project management tools, and other applications.

“An extranet allows the organization to have a closer, interactive relationship with its customers, partners, etc., without the need for complete management of the users or their IT environment,” says Ray Wagner, research vice president with Gartner Inc., of Stamford, Conn.

How does it work

Extranet functionality comes in different forms. A public website is a simple extranet, Wagner says. “If it has interactivity, it’s a little more complex. If it has a limited user base that’s controlled by the organization in some way, it’s even more complex,” Wagner says. “If it has real applications that allow business transactions, collaboration, or sharing of corporate intellectual property to occur, it’s very complex and requires significant resource outlay, planning, and security.”

Extranets also require measures to ensure privacy and security of information. Some of the security methods that can protect extranets from unauthorized access include the use of virtual private networks (VPNs), firewalls, user authentication and/or encryption.

Extranets for small business

One way for a small business to provide an extranet is through hosted applications, like WebEx’s WebOffice, Trichys’ WorkZone, and Microsoft SharePoint Services. In addition, Microsoft plans to release Microsoft Office Live, a hosted version of the Office application suite that allows groups to collaborate.

Sharing information via a hosted workspace is often easier on the bottom line, which is important to the small or fast-growing business, says Karen Leavitt, vice president of WebEx. “It’s far more cost effective to put information into a hosted workspace, a shared repository on the Web to exchange information in real time with your clients,” Leavitt says. Hosted applications are great for small businesses without an IT department, she says. “There is no setup at all,” she says. “Everything is hosted on the Web.”

Besides saving a company the cost of running a more expensive server-based application, like Microsoft Exchange, such collaboration services help a company to accelerate revenues. “If a sales guy can literally meet with six different prospects in a day by conducting Web meetings with them, rather than getting on a plane and doing one or two, they have more opportunities to close business for the company,” Leavitt says.