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What Is Extranet? - Definition & Concept

Instructor: Kent Beckert

Kent is an adjunct faculty member for the College of Business at Embry-Riddle Aeronautical University and has a Master's degree in Technical Management.

In this lesson, we will explore an extranet, how it differs from an intranet and the internet, and the benefits it can provide a company. We will also discuss where an extranet resides and its special access requirements.

What is an Extranet?

An extranet is a communications network based on common internet protocols including the Transport Control Protocol and the Internet Protocol (TCP/IP), and typically used for information sharing. An extranet differs from an internet website in that access to the extranet is restricted to individual users possessing the appropriate login credentials. Additionally, an extranet can be subdivided into multiple specialty areas with each having different access requirements. Therefore, information and data can be isolated so that a business partner, customer, or vendor may only access the information pertinent to their operations, and prohibits access to other sensitive company data.

Extranet Example

FPS is a large shipping company specializing in transporting packages and other goods. FPS has several customers, one of which is the XYZ Corporation, who ships many products to their customers. XYZ Corporation requires detailed shipping reports and associated documentation. FPS does have a website on the internet that everyone can use to track packages, but the website does not offer the level of detail or meet XYZ's privacy requirements. XYZ needs the ability to access reports detailing all packages shipped, by whom, and package receipt data. To meet their customer's needs, FPS creates an extranet that requires a special login. The extranet offers XYZ Corporation access to their own detailed proprietary reports and related shipping documentation.

Extranet Diagram
Extranet Diagram

Internet vs. Intranet vs. Extranet

  • Everyone has access to the internet.
  • People who work for a company will have access to the company intranet.
  • An extranet is created by a company to offer customers, suppliers, and vendors specific data without allowing them access to other proprietary or sensitive company data.

Extranet Benefits

Having an extranet provides ease in retrieving data, sharing graphics, documents, and other forms of communication while protecting a company's proprietary information. Also, customers can review information in a secure environment while collaborating with their suppliers, partners, and associated vendors. Having an extranet restricts access and can be used to discuss sensitive information allowing companies to make adjustments to schedules, operational procedures, and personnel issues, all outside the view of their competitors. Other benefits of having an extranet include cost and time savings, convenience, and self-service capabilities.

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