Behind the Intranet Boom

By Joe Mullich

Using the Internet for intracompany purposes has obvious benefits.
Is this the ultimate use of the Net?

For all the hoopla over consumer use of the Internet, the real action in Web technology is going on behind corporate firewalls, as is demonstrated by market research as well as anecdotes. By 1998, sales of Web servers for intranets will be four times as great as sales for Internet sites, predicts Zona Research, a consulting firm in Redwood City, CA. According to a survey conducted by Forrester Research of Cambridge, MA, 16 percent of Fortune 1000 companies firms already have an intranet, 26 percent are building one and 24 percent are considering building one: a total of two out of every three companies.

There are some evident reasons for all the intranet activity. Intranets are fast and scalable. The buy-in for an intranet is usually low, especially for companies that already have the necessary infrastructure in place. "The Internet, while being a populist tool and exciting and dynamic, is limited by individual bandwidth capabilities," says Harry Fenick, director of Zona Research. "Most companies already have the physical environment to support an intranet and plenty of bandwidth to go around." Web browsers and servers are suited for in-house applications such as phone directories that are costly to maintain and update in paper form.

Intranets can provide a variety of functions. The simplest ones act as little more than corporate bulletin boards. Others can be foundations for moving information, such as e-mail. Intranets may also support daily business functions, such as delivery status and order processing.

According to Carl Lehmann, a senior analyst at the Boston office of the Meta Group, there are four types of intranet usage: publishing (based on straight HTML text); interactive (can query a database but not populate it); transactional (allows a database to be populated); and process-centric (adds workflow rules). "Most of the intranet applications in use now are publishing with some interactive capabilities," says Lehmann. "As companies begin to feel comfortable with those models, they move to the transactional and process-centric intranet usage. Consequently, the level of sophistication becomes higher, and the business application becomes mission-critical."

Competing with Client/Server

The bare bones of an intranet are comprised of TCP/IP (the transmission protocols used on the Internet), information servers and authoring tools. Most intranets use internal corporate servers that users access through dial-up connections or a local-area network (LAN). Intranets are constructed with many of the same tools that are used for client/server development. Indeed, many leading client/server tool vendors are preparing versions of their products for use in intranet or Internet development.

Yet an intranet offers some distinct benefits over basic client/server. TCP/IP and other open standards allow browsers to link with information sources ranging from databases accessed through Structured Query Language (SQL) to Lotus Notes workgroup software. It strips away an organization's concerns over standards, proprietary tools and network protocols. An intranet can make use of any desktop platform and products from a wealth of vendors to retrieve the same bit of network data. As the Java programming language develops, many experts believe that intranet work will increasingly take the place of client/server development.

Intranets, with point-and-click hyperlinks and graphical user interfaces (GUIs), allow even technologically unsophisticated users to navigate through complex applications without much training or support. For example, Kaiser Permanente, the world's largest health maintenance organization, installed an intranet for its Pacific Northwest region. Officials at the Portland, OR, regional headquarters didn't feel the need to offer special training to tell users what was available on the intranet. According to Homer Chin, M.D., the region's assistant medical director, the intranet is so intuitive Kaiser figured users would have little trouble learning this on their own. (However, Kaiser has a webmaster available to troubleshoot for users.)

By the end of the year, Harold Kurt, a Kaiser systems analyst, expects the intranet to be accessible from 4,000 desktops: roughly a tenfold increase from the number of desktops in the region's two-state area that can access it now. The intranet currently is used primarily by health professionals, such as doctors and physician's assistants, to find medical information.

While an intranet is an alternative to the more expensive client/server environment, it isn't particularly robust. "Many consider an intranet browser to have the potential to be a universal client, partly because it can take on characteristics of specific applications when you download either a plug-in or a Java applet," says Lehmann. "In theory, it's a lot easier to develop a plug-in for a specific application than for a customer GUI client. The bad news is the browser model is immature and somewhat unreliable. The combination of Java applets and/or controls and/or plugs can crash the client."

Interacting with Other Systems

Intranets also can serve to leverage existing systems within the organization. For instance, they often are built on top of legacy systems, such as phone directories and human resource materials. The Kaiser Permanente intranet initially contained much information already being used in a five-year-old Fortran application. "We just put a new front end on the existing data," says Kurt. Unlike the Fortran application, the intranet will expand access to the information to all users at Kaiser. The intranet will also provide users with a GUI instead of the cumbersome DOS interface. When migrating the application, Kaiser's IS department quizzed users on information they might want augmented; this interaction led to new features, such as e-mail addresses being added to the telephone directory.

The intranet project was made simpler by fortuitous timing. Kaiser Permanente already has a Web site running, and offices around the region were installing Celebris XL 6150 workstations from Digital Equipment Corp. equipped with Netscape browsers to enable physicians to use computerized patient records. Since the workstations had Web browsers, primarily to give physicians access to medical material on the Internet, the intranet required little additional expense.

When the Internet and intranets began to emerge, some observers saw them as killers of Lotus Notes, which dominates the workgroup computing market with more than 4.5 million users. After all, the reasoning went, why pay expensive licensing fees and put up with the management overhead required with Notes when you could use a cheaper and simpler intranet? Now, however, people are beginning to recognize that Notes and intranets offer strengths and weakness, and some companies are leveraging the benefits of both technologies. Last year, International Data Corp. (IDC) of Framingham, MA, asked companies that had or were planning internal Web sites if intranets would replace groupware products. The answer was decidedly mixed: 36 percent said yes, 37 percent said no and 27 percent did not know.

The main advantage that Notes and other groupware products have today is their ability to replicate. Notes servers at different locations can be continually updated to ensure they each contain the same information--something intranets are not yet capable of. Indeed, many companies are using both Notes and an intranet. Most of the 20,000 online users at Tyson Foods, the world's largest chicken producer, based in Springdale, AK, are connected by the company's intranet. However, Tyson's international sales groups and R&D department use Notes to capitalize on its security, workflow and replication capabilities. "Companies will eventually see the value of using these kinds of multiple solutions depending on their tactical needs," says Ian Campbell, director of collaborative computing for IDC.

Clarifying Costs

Because intranets can piggyback on existing infrastructure, they may prove to have much lower startup costs than other new technologies. Some companies express surprise over the ease and low cost of intranet development. "I read a story about intranet development, and the writer made it seem hard to put up significant Web content," says Jim Bennett, PC LAN/WAN manager for Tyson Foods. "We found it simple." This is because Tyson, like many companies, already had the infrastructure needed for an intranet, including the TCP/IP backbone. Apart from spending $10,000 for a server and hiring a webmaster (who also oversees the company's external Internet site), Tyson incurred no additional development costs. "In terms of the overall corporate structure, the intranet is a very small cost of what we're doing," says Bennett.

According to David Linthicum, a former consultant and currently technical manager with AT&T Solutions in Vienna, VA, large organizations report it costs less than $40 per user to create an Internet infrastructure, versus $2,000 per user to create an infrastructure for traditional two-tier client/server application development. Many components of an intranet, such as Web browsers and Web server software, are free or nearly free.

The main cost of an intranet is the necessity to run TCP/IP on the company network. These protocols demand capable routers and greater memory in desktop PCs. If an intranet Web server becomes intensively used, the LAN may have to be reconfigured. What's more, according to IDC, a company could spend as much as $1 million in building a sophisticated application, with most of that cost derived from designing custom links to connect the Web server to existing corporate applications.

However, some observers say an intranet may not follow the classic models for cost justification. Tyson Foods, for example, has determined that putting its company phone book on an intranet will save some $360,000 a year in printing costs, but most measures are not so clear-cut. "You're putting your forms, your HR handbook and your company newsletter online. How do you cost-justify that?" asks Fenick of Zona Research. "Some companies publish internal marketing requirements and specification documents. It's very difficult to quantify from a raw perspective what it costs to make 50 Xerox copies of something to the benefits of having more people being able to look at it."

As the use of an intranet expands, so do the resources needed to support it. This need is determined by the amount of information maintained on each server; the size of the user community; whether users maintain active links to the intranet, which require more bandwidth; and whether bandwidth-grabbing information such as audio, video and graphics will be transmitted over the network.

For these reasons, experts recommend overestimating, allowing at least 40 percent excess capacity to permit the intranet to grow. For instance, when Kaiser Permanente launched its intranet, the organization realistically needed a server with 32MB of memory, yet the HMO ordered one with 96MB. Even that may not be enough. Kaiser is planning to order another server for one application--a database containing 5,500 pages of material about hazardous chemicals. The database will be accessible to the other 11 Kaiser regions in the United States. With that many people hitting against the server, systems analyst Kurt says the database would need its own dedicated server.

Who Owns It?

Whatever its benefits, an intranet is hardly a no-brainer to develop and maintain. For one thing, it raises prickly management and control issues, because it inherently decentralizes information. And because intranets are easy to use, IS departments must help to decide who should be allowed to publish on the intranet and how everyone else will find the information that's there.

IS often has to do a selling job to get an intranet started. For example, there's Siemens Business Services, the Burlington, MA, systems integration and outsourcing arm of a diversified, global manufacturer that makes everything from hearing aids to power plants. Business Services knew that the nearly two dozen Siemens divisions in the U.S. are as independent as their product lines. To get these units to buy into an overarching intranet, Business Services launched a targeted direct mail campaign to the divisions' sales and marketing managers, touting the intranet's benefits and the advantages of the units working together. "We had to help people within the community make the business case to their individual organizations to make the Siemens North American intranet viable," says Gerald Kiley, director of business development.

Even in a less cumbersome management structure, intranets can take selling both to the top and the bottom of an organization, as happened at Schlumberger, Ltd., the international oil company based in Sugarland, TX. Like most intranet projects, Schlumberger's started in the IS department. In 1992, just as the Internet was coming into vogue, the project needed a champion to move it throughout the company. Scott Guthery, a scientific advisor, traveled to engineering centers around the world, in one case lecturing a staff of five on a small island in Finland. Guthery would present a one-hour lecture, then spend the rest of the day surfing the Web with people from the company. His hands-on demonstration gave people examples of how they might use the intranet themselves. "The only thing I would have done differently is have more people like me acting as cheerleaders," says Guthery. "If I had been able to clone myself a couple of times, the word would have spread a lot faster."

Intranets demand that IS both take and give up control. According to an IDC study, 60 percent of Web sites are under IS control, and 40 percent are not. Most experts agree that IS should allow departments to publish information on their own internal Web sites in whatever manner they choose, as long as the business objectives of the intranet are carefully defined and followed. However, the decentralization of information can become a concern. "Some people will be terrified of an intranet and not want to take part," says Fenick of Zona Research. "Or, if they understand the importance, there will be turf wars over who gets to run and manage it."

Easing those concerns requires coordination within an organization. An intranet becomes an integration of a company's groupware, Web and e-mail applications. "Companies are trying to clean up the standards they use for e-mail as they look to gain the benefits of proprietary environments and open extensions to outside systems," says Lehmann of Meta Group.

An intranet requires a consistent architecture for e-mail, internal publishing and document management. However, decisions on these various architectures typically are made by different people within a company. "The Internet technologies provide a foundation for all of them to cooperate," says Lehmann. "Vendors in those areas are working to incorporate Web technology and open standards. Within 18 months they'll have better integration capabilities across the board. Right now it requires a lot of cooperation between IT teams and lines of business to maintain those."

Personal Touches

What end users do on the intranet can also be an issue for IS. According to Fenick, when an intranet first goes up, employees, excited over the technology, often put up personal Web pages containing pictures of their children and other material of little value to the company. "A company has to decide strategically what they want out of the intranet and set that task in motion, while allowing the personal and department Web pages to simply go on, and not allow one to deflect from the other," he says. "Companies get in trouble when they don't think that through and try to overbearingly restrict the personal publishing."

Like external Web sites, intranets require upkeep and attention, as well as an appreciation for the unique nature of communicating online. At Tyson Foods, Bennett says, the first attempts at intranet Web sites included a lot of graphics. However, managers at the company demanded the "glitzy stuff" be scaled back so they could more easily access the information they wanted.

"A Web site may be developed for an esoteric audience, and when a stranger comes in trying to figure it out, he has no clue and becomes frustrated and leaves," says Lehmann. "One of the biggest mistakes companies make with their intranet sites is having them so poorly designed that users can't even navigate through them." Another error is to neglect the site. "You have to commit resources to keep it current and ongoing," Lehmann says. "If you do this as a one-shot deal and don't support and maintain it, you're wasting money and energy."

Schlumberger set standards for its intranet, delineating the roles and responsibilities of webmasters and producing a Web style guide. However, the company encouraged individual workers to put up sites that they thought would benefit the company, a process CIO Larry Guttman describes as akin to "letting 1,000 flowers bloom." Hundreds of users around the company developed their own personal Web pages. One person put up a page for parents, listing things like baby-sitting services with a link to the local PTA home page.

Schlumberger's IS department awards blue ribbons to the best internal Web sites. This encourages users to put up good links and avoid what Guttman calls "throwing a hodgepodge of information up there. If you look at a site, either external or internal, you can instantly tell if it's alive," he says. However, now Schlumberger is facing another common problem: how to find material on the intranet. When there were only 50 servers around the company that wasn't hard. Now that there are hundreds, locating information can be a difficult task.

"The ability to have everyone in the company turn their desktop into a server is not necessarily a good thing," says Fenick. "There is so much data that is disorganized. People spend days trying to locate something that is sitting on the server next to them in a place they haven't guessed, so a management structure has to be developed. And there are wars over that, because people tend not to want the structure. They want it to be their own Web site, and they can put on it whatever they want."

Such problems as these are the results of success. While intranets offer challenges, their potential payback is great. Intranet development now seems sure to zoom past the activity on the outside Net.

Joe Mullich has written for over 70 publications. He can be reached at