Portals and Extranets: Coming Your Way
by Dr. Joel Orr

What's the difference between a portal and an extranet? Emphasis, mostly. Both rely on Web technology to share information among people. The emphasis in a portal is on using a Web page as a place to bring together "windows" into disparate applications and databases that don't normally talk to one another at all.

Meanwhile, the definition of an extranet is simply, "the use of Web technology to share information between organizations." Most portals are extranets; some extranets are portals. If the world of engineering and manufacturing can be said to be on a journey toward improved methods and superior technologies, dotcom businesses were like frisky teenagers who shot off over the horizon without waiting for the bulk of the travelers. Of course, many of them found no water, or were slain by various forces of nature-another way of saying that they went where there was no market, no support structure for their businesses. But some survived-and at a more realistic pace, are helping the mainstream move toward the new tools.

One of the early "shooting stars" was the portal application-a Web site that could be customized by a company to share information both inside and outside its firewall. Three years ago, portals were "hot" in Silicon Valley and on Wall Street. They were going to solve problems like supply chain integration, design team collaboration, and borderless e-commerce-and then stop for breakfast. They would succeed where expensive custom-designed software, ERP, and databases had failed because of the platform independence of Web technology, and the intrinsic interoperability features of XML. They failed. By two-and-a-half years ago, the leading IT rags ran headlines such as: "Portals are passé." Companies founded to provide portal software, or to create and support portals, dropped like flies. Most thought they could "sell at a loss and make it up in volume." By giving away services, they hoped to create a demand. But the demand never materialized, for most. The touted benefits were not generally deceptive; they were simply not great enough to overcome the fear of change in the prospective users. Also, the benefits would accrue to the organization-while those who would have to implement the technology would see only pain. Meanwhile, the world of extranets was undergoing a similar decline. Extranets focused largely on project-oriented work-more in construction than in manufacturing. However, the passing of the public portal and extranet phenomenon was exaggerated. Portals and extranets didn't go away; they simply went in-house. One of the biggest reasons companies did not flock to the public portals was fear that their data would not be secure-especially if the company were to fail. But in-house implementations did not suffer from that weakness. So today, companies and government agencies all over the world are simplifying their internal and external communications through the use of portals-which can be accessed by anyone with a Web browser. And they are gathering all their contractors together through the use of extranets.

Tom Koulopoulos heads the Delphi Group, a consulting and market research firm that has been following portals for all four years of their existence-much as my firm's EXTRANET WORLD has been following extranets. "The portal play is fundamental; it is infrastructure, not just an application," said Koulopoulos. "In all systems that comprise the value chain of a business, you need a single point of access. That's what a portal provides." The same can be said of extranets, with regard to project-based businesses. "Our lives have become as complex as those of the arbitrageurs whose IT people created what we now call portals," he continues. "Nobody has just one job anymore." Just as I have written about extranets, Koulopoulos asserts that the portal must be the sole communication nexus for the user; if there's more than one, much of the benefit of a portal is lost. Portals provide a place for communities of knowledge and practice to meet and share. "Everybody knows something; nobody knows everything. Portals help everyone connect," he said. Quoting Peruvian economist Hernando de Soto, Koulopoulos says, "Capitalist economies survive because of an enormous legal infrastructure that creates a basis for trust; it provides for indisputible integrity of ownership." Portals can do the same for business on the Web.

Koulopoulos and I agree that Web services are the Next Big Thing for portals and extranets. (The term "Web services" refers to a framework of Web-based objects that are combined to create applications. Microsoft's .NET initiative is one such; the other horse in this race is Sun One, supported by an open consortium of vendors and users.) "Portal dial-tone" is coming, and will include non-Web portal applications. While portal or extranet implementation guidance is far beyond the scope of this article, here is a useful tip: Do not release a newly-deployed portal or extranet to the entire user community at once; pilot it for a time. The complications resulting from simplified communications are always underestimated. Delphi Group reports that, as an industry, portals appear to be about a $740-million business in 2001, and are expected to double in 2002. My own EXTRANET WORLD indicates that extranets are even smaller, as a business-and both are therefore still too small to attract Microsoft.

Bottom line: Portals and extranets use the same technology to somewhat different ends. Both are crucial to the spread of collaboration and integration in engineering and manufacturing.

Will portals and extranets continue to be separate? I believe the portal may be the meta-framework into which the project extranet is integrated, providing a way to tie together project-level information with business-level intelligence.

Joel's personal Web site is http://www.joelorr.com. To learn about extranets, go to http://www.extranetnews.com.