Definition of Extranet

An extranet is a controlled private network that allows external entities, such as suppliers, partners, or clients, to access specific resources or information within an organization’s intranet. By using secure protocols and authentication processes, it ensures that only authorized users can access the shared data. Extranets facilitate communication, collaboration, and information sharing between organizations while maintaining security and privacy.


The phonetic pronunciation of the keyword “Extranet” is: /ˈɛkstrəˌnɛt/

Key Takeaways

  1. Extranets are private, secure, and web-based networks used to enhance communication, collaboration, and information sharing between a company and its external stakeholders like suppliers, vendors, clients, and partners.
  2. Extranets facilitate streamlined business processes, improve productivity, and enable easier access to resources by providing authorized users a single point of access to relevant information, tools, and services.
  3. Implementing an extranet requires careful planning and attention to security measures, such as robust authentication, access controls, and data encryption in order to protect sensitive information from unauthorized access or breaches.

Importance of Extranet

The term “Extranet” is important in the world of technology as it represents a secure, private network that allows controlled access to external entities, such as suppliers, vendors, or partners.

It enables organizations to collaborate, communicate efficiently, and share selective information or resources with these external entities, without exposing their entire internal network.

As a result, extranets facilitate improved efficiency, better business relationships, and streamlined processes, while ensuring the security and integrity of sensitive data.

Furthermore, the use of extranets can lead to cost savings by reducing complex manual processes and fostering greater automation and accuracy.


Extranet serves a vital purpose in bridging the gap between internal and external communication for organizations across various industry domains. The primary function of an extranet is to provide secure and controlled access to a company’s internal resources, databases, and applications to a selected group of external stakeholders.

These external stakeholders mainly include suppliers, partners, and clients, who require direct communication with the company for collaboration and achieving common business goals. By establishing a dedicated platform for information sharing, an extranet enhances the efficiency and effectiveness of the exchange, thereby leading to improved business operations, streamlined processes, and reduced delays and costs.

In addition to fostering collaboration between organizations and their external partners, an extranet also serves as a valuable tool for facilitating project management, supply chain operations, and customer relationship management. Armed with advanced features such as access controls, document management systems, and workspace customization, extranets empower companies to disseminate and manage sensitive information securely without compromising their internal network.

Moreover, the integration of third-party applications, real-time updates, and tracking further strengthens its ability to enable informed decision-making and cater to the dynamic needs of businesses. In essence, extranets emerge as a cornerstone for building an interconnected ecosystem that can adapt and thrive in today’s complex and fast-paced business environment.

Examples of Extranet

Supply Chain Management: Companies like Walmart and Amazon utilize extranet systems to manage their supply chain processes efficiently. They provide their suppliers and vendors with access to relevant data, such as inventory levels, order statuses, and shipment tracking. This streamlines communication and helps in ensuring the timely delivery of goods, optimizing inventory levels, and reducing logistics costs.

Online Banking: Banks often use extranet technology to provide secure online services for their customers. Customers can access their account information, make transactions, pay bills, and apply for loans through a secure and personalized environment. For example, Citibank and Bank of America offer online banking services through extranet platforms to ensure the privacy and protection of their customers’ data.

Healthcare Information Systems: Hospitals and healthcare providers employ extranet systems to share patient records and medical data with authorized personnel, such as doctors, nurses, and administrative staff. This ensures that critical patient information is easily accessible, facilitating better and faster decision-making in healthcare delivery. For example, the Health Information Exchange (HIE) in the United States allows healthcare providers and organizations to securely exchange patient data through extranet systems.

Extranet FAQ

What is an Extranet?

An Extranet is a private network that allows authorized external users, such as clients, vendors, or partners, to access a company’s internal resources. It uses the internet and web technology to securely share information and collaborate in real-time.

What is the difference between an Extranet, Intranet, and the Internet?

While all three terms refer to networks, they have distinct purposes. An Intranet serves as a private network for an organization’s internal use, the Internet is a global public network used for general information exchange, and an Extranet extends an Intranet’s functionalities to selectively include external parties.

What are the benefits of using an Extranet?

Some benefits of using an Extranet include improved communication with external partners, increased efficiency in information sharing, enhanced collaboration on projects, and better supply chain management. It can also provide external stakeholders with access to relevant information, improving transparency and trust between organizations.

What security measures should be taken when implementing an Extranet?

Security is vital for an Extranet, as sensitive information is often shared with external parties. Measures to secure an Extranet should include robust authentication methods, data encryption, secure and managed access control, intrusion detection systems, and ongoing monitoring for unauthorized access or suspicious activities.

What kind of software or platforms can be used to create an Extranet?

Various types of software and platforms allow organizations to create Extranets, ranging from custom-developed solutions to off-the-shelf software. Popular platforms include SharePoint, Confluence, and Huddle. When choosing the right solution for your organization, it is essential to consider factors such as scalability, ease of implementation, security, and integration with your existing tools and infrastructure.

Related Technology Terms

  • VPN (Virtual Private Network)
  • Intranet
  • Firewall
  • Remote Access
  • Secure Authentication

Sources for More Information


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