MARCH COMMENTARY OF THE MONTH

 

THE DOMINANCE OF THE INTRANET

General

Everyone knows that Internet growth, both in terms of users and servers, has grown exponentially over the past several years with estimates of the number of users varying from 10 million to 50 million. Our own estimate is that there are 15 million users currently, give or take 5 million. The truth is no one knows. However, there are reliable estimates that the number of servers is currently around 80,000.

Would you believe that the past and future growth of the Internet is just “ho-hum” as compared to what we are going to see in the growth of “Intranets”. But before defining what an Intranet is, let me just state that a recent Culpepper & Associates conference IDC\Link estimated that the number of Internet and Intranet servers is about 75,000 each. By the year 2000, IDC\Link estimates that annual shipments of Internet servers will approximate 450,000, while the shipments of Intranet servers will approximate 4,500,000! The installed base by the year 2000 of Web servers is estimated to approximate 10.2 million sites, of which 9.2 million will be Intranet sites and 1 million will be Internet sites. It boggles the mind, doesn’t it.

Now what is an Intranet? Open Text has defined it as a “private web”. The best definition comes from JBS Computer Systems, Ltd.: - “it is the implementation of Internet technologies within a corporate organization, rather than for external connection to the global Internet”. It lies behind fire walls, but accessible internally by employees either directly or through the Internet and often by suppliers and customers who are password protected. Ford is reported to have more than 80 internal web servers with 56,000 licensed Netscape navigator clients. Hewlett Packard has more than 500 web servers for internal use; Silicon Graphics, more than 300. Tyson Foods uses an Intranet to connect 100 sites and more than 5,000 employees. More than half of Netscape’s $20M sales were for internal webs. Fortune Magazine-November 27, 1995. Current estimates are 70% of Netscape's’s sales are from Intranet sites. Fortune Magazine-February 19, 1996.

Some say that the Intranet is an ideal solution for any organization with more than 100 users, and/or with remote locations distributed over a wide geographical areas. For a comprehensive discussion of Intranet computing, take a look at the Web Site of Process Software Corporation.

Why are Intranet sites growing the way they are? The answer is that they are:
  • cost effective
  • easily updatable
  • easy to deliver information
  • easy to have information available on demand
  • basically secure
  • relatively easy to configure, use and manage
  • can be set up company wide and also by department or functional area
  • well suited for multimedia applications
  • excellent for reducing printing costs and distribution time
  • able to run across all platforms and handle all clients
  • a gateway to the Internet
  • integratable with internal corporate databases
  • easy for users rather than professional IS staff to develop content
  • and since they are based upon browser technology, many users already have experience in them or can easily learn.
Early adapters have used Intranets for:
  1. Publishing corporate documents - background, product literature, marketing literature, annual reports, newsletters, price lists, manuals, corporate policies, etc.
  2. Access to searchable directories - corporate phone books, addresses, calendars, schedules, etc.
  3. Access corporate databases.
  4. Corporate/department/individual pages.
  5. Simple groupware applications.
  6. Software distribution.
  7. E-mail - normal e-mail along with multimedia attachments.
The Intranet Market

For software developers and sellers, the Intranet phenomenon is a market which numerous companies have now recognized and which should beckon many more. Sun’s CIO, Bill Raduchel, has said, “We think the Internet is where the majority of profits will be made over the next five years. It will be the dominant force in organizational computing very, very quickly.” Fortune - 2/19/96. We think this applies in spades to the Intranet market.

Intranet vs. Groupware

The question which inevitably arises is to what extent Intranets will compete with groupware, particularly Lotus Notes. For many, any Intranet is a much cheaper, more quickly developed, more easily managed solution than Lotus Notes. And users can participate intimately without a specialized Lotus Notes developer. A recent study indicated the average cost of a Notes application was around $250,000 while an Intranet could be set up for less than $10,000. However, at the current time Intranet technology does not have the groupware collaboration benefits and security that Notes has. We doubt whether that will be the case two years from now. One only has to consider Netscape’s recent acquisition of Collabra Software, a groupware developer.

Of course, IBM/Lotus has recently announced the technology to allow Notes servers to act as Web servers and to easily port Notes content to the Web. We would not presume to guess the outcome of a Intranet vs. Notes battle, but it would not be surprising to see the two technologies merge together.

Nonetheless, the Lotus Notes approach may be a Rolls-Royce solution that is simply over-kill for many organizations. Moving the responsibility of content management from MIS to the department that creates the information can result in considerable cost benefits.

Conclusion

Amid all the hoopla, several things appear to be certain. First, the use of Internet technology to provide Intranet networks will grow immensely in the next few years. Secondly, software developers should examine this market. Thirdly, all users should now review the use of Intranet technology to ascertain to what extent it can meet both their communication and groupware needs.

And to end on a philosophical note, it seems to us and to a number of others that the Internet (internal and external) is the computing platform of the future, succeeding (but at the same time riding on top of) the mainframe, minicomputer, and PC. We just have to determine how to use it to the benefit of our companies, employees, customers, and suppliers benefit.

 

© LPI Software Funding Group, Inc.  

593 Cricket Lane, Suite 200     Wayne, PA 19087  

610.687.4434      610.341.6100   sales@lpilease.com
                         March 7, 2006