An extranet is an extension of your company’s internal network that allows outside users to provide and access information in a secure environment.

Like an intranet, it is web browser based, making information available on any computer without any special equipment. However, an extranet does require extensive security and may need special software to provide user authentication and to encrypt data.

Extranets are used to extend your business applications to suppliers, clients, vendors, customers or other businesses. They make sharing data simpler and more cost effective. Extranets have even allowed companies to save money from an unexpected source — allowing employees to telecommute. As a result, a company can save on the cost of maintaining on-premises offices and equipment for these employees.

Some uses of extranets include:

Supporting day-to-day collaboration by service companies who need to share and organize documents with their clients

- Exchanging billing invoices and payments through Electronic Data Interchange (EDI)

- Sharing online catalogs with suppliers, vendors and customers to eliminate printing costs

- Entering into joint ventures with other businesses

- Collaborating with other companies to develop training materials

- Providing online services to customers

One of the best known extranets in the word is the UPS package tracking system. Most people don’t realize that they are using an extranet to track their packages, but they are. The customer, whether business or individual, logs in to the UPS network over the internet to see where their package is and when it will be delivered.

Like intranets, large companies have been using extranets for years. The need for special software, firewalls, and trained personnel put them beyond the means of smaller businesses. However, like intranets, extranets can be purchased from application service providers who will host and maintain the extranet software and “rent” access at a cost substantially lower than implementing and maintaining an internal system.