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Chapter 7
The Intranets and Extranets
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Learning Objectives
Describe the relationship among the Internet, an
intranet and an extranet
Discuss the role of firewalls for intranets and
extranets
Discuss the functions of intranets
Discuss the applications of intranets
Describe the industries that use intranets
Discover typical cases of intranet applications
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Identify the key element of extranets
Identify the key technologies for tunneling
Discuss the applications of extranets
Describe typical industries that use extranets
Discuss the business models for extranet
applications
Describe the concept of embedded extranets

Learning Objectives (cont.)
Automotive Network Exchange -
the Largest Extranet
Companies in the automotive market swap
supply and manufacturing data
Involve 10,000+ companies
Include CAD/CAM file transfers, Electronic Data
Interchange (EDI), e-mail, and groupware
The networks EDI element alone will slice $71
from the cost of designing and building each car
Savings of $1 billion a year for the Industry
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Chrysler will pay for fewer T1 Lines and satellite
connections
Standardizing one protocol-IP will reduce
support costs
The time it takes to turn around an order will be
much shorter
The faster the parts come in, the faster the cars
leave the assembly line, the larger the customer
satisfaction and manufacturers profit
Business-to-business virtual private networks
(VPN) are used
Automotive Network Exchange -
the Largest Extranet (cont.)
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The Internet
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The Internet is a public and global
communication network that provides direct
connectivity to anyone via a Local Area Network
(LAN) and an Internet Service provider (ISP).
Access to the Internet is not restricted to anyone.
This lack of control may result in an information
overload. Due to its vast scope and openness,
the information is difficult to locate. Users need
effective and efficient search engines to navigate
the sea of information . There is no centralized
control of network and information.
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The Intranets
An intranet is a corporate LAN and/or Wide Area
Network (WAN) that is secured behind companys
firewalls and it uses Internet technologies.
Although intranets are developed using the same
TCP/IP protocol as the Internet, they operate as
private networks with limited access. Only
employees who are issued passwords and access
codes are able to use them. So, intranets are
limited to information pertinent to the company and
contain exclusive and often proprietary and
sensitive information. Firewalls protect intranets
from unauthorized outside access.
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Public/External
Internet Users
Intranet
Clients
Servers
ERP
Legacy
systems
E-mail
servers
Web
servers
Databases
Firewalls
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The Intranet (cont.)
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The Extranet
An extranet implies an extended intranet, which
uses TCP/IP protocol networks (like the Internet) to
link intranets in different locations. Extranet
transmissions are conducted over the Internet to
save money. But it offers no privacy or transmission
security. By creating tunnels of secure data flows
using cryptography and authorization algorithms,
called VPNs, the security can be improved.
Extranets provide secure connectivity between a
corporations intranets and intranets of its business
partners, material suppliers, financial services, and
customers.
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Tunneling Internet
Extranet
Intranet
Firewall
Intranet
Firewall
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The Extranet (cont.)
Suppliers
VPN
Distributors
VPN
Customers
VPN
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Summary : Internet, Intranet, and Extranet
Network Typical Type of
Type Users Access Information
Internet Any individual
with dial-up
access or LAN
Unlimited,
public; no
restrictions
General, public
and advertisement
Intranet Authorized
employees
ONLY
Private and
restricted
Specific,
corporate and
proprietary
Extranet Authorized
groups from
collaborating
companies
Private and
outside
authorized
partners
Shared in
authorized
collaborating
group
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Firewalls
Definition of Firewall
Software and hardware that allows only those
external users with specific characteristics to
access a protected network
Provides potential customers with secured
account, credit card, and loan information
Usually located at a gateway point and controls
traffic between internal and external networks
Generic Functions of an Intranet
Corporate/department/individual Web-pages
Database access: Web-based databases
Search engines and directory: Assist key word-based search
Interactive communication: Chatting, audio and videoconferencing
Document distribution and workflow: Web-based download and
routing of documents
Groupware: Enhanced e-mail and a bulletin board
Telephony: Intranets are the perfect conduit for computer-based
telephony
Integration with electronic commerce: Interface with Internet-
based electronic sales and purchasing
Extranet: Link geographically dispersed branches, customers and
suppliers to authorize sections of Internets. Can create happier
customers, more efficient suppliers, and reduce operating costs
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Categories of Intranet Application Purposes
0 10 20 30 40 50
Accounts Payable
Accounts receivable
Logistics and transportation
Sales records
Data warehouse
Document routing
Inventory
Legacy systems access
Policies and procedures
Customer records
Document sharing
Purchase orders or order entry
Product catalogs and manuals
% of respondent
Electronic Commerce: sales and purchasing online
Customer Service: UPS, FedEx and other shippers have
proved that information about product shipments and
availability makes customers happier
Reduced Time to Market: Easy online access for product
development speeds teamwork
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Enhanced Knowledge Sharing: Web pages can enhance
knowledge sharing
Enhanced Group Decision and Business Processes: Web-
based groupware and workflow is becoming the standard intranet
platform
Empowerment: All information should be available to everyone
with the ability to know and act independently
Virtual Organizations: Web technology at participating companies
removes the barrier of incompatible communication technology
Software Distribution: Using the intranet server as the application
warehouse and avoid many maintenance and support problems
Project Management: Share reports and monitor projects
progress
Categories of Intranet Application Purposes (cont.)
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Industry Specific Intranet Solutions
Financial Services: Banking, brokerages and other
financial services, insurance
Information Technology
Manufacturing: Chemicals and oil, consumer goods,
food and beverages, general manufacturing, and
pharmaceuticals
Retailing
Services: Construction and engineering, education,
environmental, healthcare, media, entertainment,
telecommunications, transportation, and utilities
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Intranet Case Studies with ROI Analysis
The cases are organized in the following format:
Background of company
Business challenges
Before the intranet technology
Intranet cost
Intranet strategy
After intranet technology
Subjective (intangible) benefits (optional)
Lessons learned
Analyzing the ROI
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Federal Express - Package Tracking
Intranet Case Studies with ROI Analysis (cont.)
60 internal web sites allow communication
worldwide between divisions and corporate
headquarters on all issues of importance to the
employees and customers
The package tracking system allows customers
to contact FedEx and go into the intranet to find
the status of a package that they have shipped
or one that they are expecting
The intranet has gone to retailers that ship
products directly to customers and set up
computer systems that will place and ship orders
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Intranet Deployment Strategy
The intranet server platform has to meet 10
evaluation criteria
1. Scalability : The efficient transaction read/write capability
should be ensured as the number of users and access increases.
2. I nteroperability : Enterprise Web, data warehouse, message
and mail manager, online transaction processing and other
nodes will form the enterprise server platform cloud, which will
require each node to have a high interoperability presence on
the network.
3. Configurability : Vendors just provide a broadly configurable
array of enterprise servers that do not require major box swaps
as enterprise requirements change. Parts must be modular and offer
commodity component substitution with other devices from
third parties.
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Intranet Deployment Strategy (cont.)
The intranet server platform has to meet 10
evaluation criteria
4. Compatibility
expandable configuration requirements, but also standard
industry specifications to protect application investment.
: The server family must not only meet
5. Manageability : As the trend increases, enterprise systems
must be operational from any point on the network and address
the major operational management problems concerning configuration,
fault and problem diagnosis and installation.
6. Availability : As enterprise servers assume a larger role in the
electronic channel and the enterprise wide Web, these systems
must be able to sustain tens to hundreds of thousands of
accesses and transactions with minimal downtime.
7. Reliability : The hardware reliability, data integrity, systems
integration, and operational error immunity are essential.
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Intranet Deployment Strategy (cont.)
The intranet server platform has to meet 10
evaluation criteria
8. Distributeability : Whether in two- or three-tier client/server
architectures, the enterprise server must embrace the client,
assume a high degree of desktop affinity and must enable
resources to be proportioned between server and client
appropriately.
9. Serviceability : The increased value placed on uptime will
mandate online serviceability through the use of hot-swappable
components, remote diagnostics directly connected to vendor
service centers and pre-failure predictive diagnostics.
10. Stability : The generation changes in technology, and
architecture that may include changes to instruction sets,
migration from 32-bit to 64-bit computing and operating-
system enhancements for clustering and advanced symmetric
multiprocessing must minimize upgrade disruption and
preserve investment protection.
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Enterprise
Consumers
Suppliers
Clients
Business Partners
Distributors
VPN
Internet
Intranet
Extranet
Intranet
Intranet
Intranet
Intranet
VPN VPN
VPN
VPN
Remote
Employees
Basic Concept of Extranets Revisited
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Elements of Extranets
Components of Extranets
Intranets
Web server
Firewalls
Internet Service Provider (ISP)
Tunneling technology
Interface software
Business application
Methods to Configure Extranets
They can be implemented using a direct leased
line with full control over it, linking all intranets
A secure link can be created across the Internet,
which can be used by the corporation as a
virtually private network (VPN)
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Virtually Private Network (VPN)
VPN is a secure network on the Internet using the
tunneling schemes
The major objective of a VPN is to use the Internet
as an inexpensive WAN backbone
When two sites are connected across a VPN, each
must have a VPN-capable router, firewall, or VPN
access device installed
When VPN is used to link mobile clients with
Internet dial-up connections, the laptops must be
equipped with VPN client software equipped with
the addresses and associated encryption keys for
corporate host sites

Four Categories of Extranet
Products and Services
Extranet development tools
Extranet hosting and network
connectivity
Extranet services
VPNs
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Categories of Extranet Application
Enhanced Communications
Improved internal communications
Improved business partnership
channels
Effective marketing, sales, and
customer support
Collaborative activities support
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Productivity Enhancements
Benefits of Extranet Application
Just-in-time (JIT) information delivery
Reduction of information overload
Productive collaboration between
workgroups
Training on demand
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Business Enhancements
Benefits of Extranet Application
Faster time to market
Simultaneous engineering potential
Lower design and production costs
Improved client relationships
New business opportunities
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Cost Reduction
Benefits of Extranet Application
Reduced errors
Improved comparison shopping
Reduced travel and meetings
expenses
Reduced administrative and
operational costs
Elimination of paper publishing costs
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Information Delivery
Benefits of Extranet Application
Low-cost publishing
Leveraging of legacy systems
Standard delivery systems
Ease of implementation and maintenance
Elimination of paper publishing and
mailing costs
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Uses and Users of the Extranets
Information and
Services on the
Extranets
0 10 20 30 40 50 60
Accounts payable
Accounts receivable
Logistics and transportation
Document routing
Data warehouse
Sales records
Inventory
Legacy systems access
Policies and procedures
Customer records
Document sharing
Purchase orders or order entry
Product catalogs and manuals
% of respondents
Users of
Extranets
0 10 20 30 40 50 60
Franchises
Government regulators
All suppliers
Dealers
Distributors
Top-tier customers
All customers
% of respondents
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Industry Specific Extranet Solutions
0 5 10 15 20 25 30
Customer
Real Estate
Industry/manufacturing
Travel
Financial services
Computers
Information services
% of respondent
Business & professional
Percentage of Extranet Application Industries
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Extranet Cases
Connect Autodealers Kiosk: General
Motors Case
Kiosks in dealerships and shopping malls
Enable shoppers to purchase cars and
trucks from anywhere
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Distribute Tax News to Experts: Coopers and
Lybrand Case
Tax News Network (TNN) extranet
contains tax information from numerous sources,
integrating internal and external, and even competing
resources
includes full text of various tax analyses, legislative
tax codes, and major business newspapers
Extranet Cases (cont.)
Hospital Alliance Purchase: VHA, Inc. Case
VHAsecure.net
allow members to purchase directly from suppliers
chose IBM as its ISP
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Reduced Product Development Cycle Time:
Caterpillar, Inc.
Customers can use the extranet to retrieve and
modify detailed order information while the
vehicle remains on the assembly line
Extranet Cases (cont.)
Link the Worldwide Chains: Kinkos, Inc.
900 stores about 25,000 employees
Developed an extranet to offer Internet access
and rental of PC computer time to its customers
Each store connects to Internet with a 64-Kbps
channel of an ISDN link
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Managerial Issues
Are there new business opportunities utilizing the
intranet and extranet?
Consider whether the business requirements can best be
met by the intranet or the extranet.
Consult the technical people inside and outside to find
the most secure and economical implementation plan.
Review the current proprietary or leased network and
decide whether it can be replaced by intranet and
extranet.
If you are implementing the technologies of electronic
commerce, find out the niche market of intranet and
extranet technology, possibly with a business model.