The latest flowering of the Internet is the rapid growth of intranets, using Net technology for internal communications. Discussing intranets on Feb. 18 were Paul D. Callahan of Forrester Research and Amy Cortese, software editor of Business Week.
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OnlineHost: Welcome to Business Week Online! Tonight we click into the intranet, the new Internet offshoot that is spreading fast -- subject of the Cover Story in the Feb. 26 issue of BW. The speakers are Paul Callahan, director of network service strategy for Forrester Research (Forrester0), and Amy Cortese, software editor of BW (ACORTESE). The moderator is Jack Dierdorff of BW Online (JackBW).
JackBW: Good evening, everyone. Welcome to BW Online, Paul Callahan. And hi, Amy Cortese of BW.
Forrester0: Hi, Jack. Thanks.
ACORTESE: Hello all.
JackBW: So we all start with the same deck, try this question, Paul and Amy.
Question: Just what is an intranet, anyway?
Forrester0: Forrester defines it as an internal corporate TCP/IP network that carries Internet-developed applications like the Web -- and its future cousins.
ACORTESE: One of the interesting things about the intranet phenomenon, though, is that is just sort of sprang up. Initially, companies looked at the Net as a way to communicate externally, with customers, potential customers, and the general public. But the same things that make the Net and the World Wide Web a great communications medium for that sort of thing work wonderfully inside companies, too.
JackBW: That leads nicely to this question.
Question: What are the advantages of creating an intranet, for employer and employee? Can you give us some examples?
Forrester0: Sure. First, the highway is already in place. Everyone has a routed internetwork that supports IP. Second, nobody needs an architect to build the sucker. It's very simple. Third, the CEO reads Business Week and already knows about it.
JackBW: Thanks for the plug! How about the examples the questioner asked for?
Forrester0: First, internal data flows freely inside the corporation -- 401(k) balances, meeting schedules, and the company phone book. Second, once the intranet is in place, users get access to the world at large.
ACORTESE: For employees, intranets unlock all sorts of data and corporate knowledge that were previously very hard to get at. Companies such as EDS, Visa, Eli Lilly all are sharing these sorts of things via intranets.
JackBW: How about this question from BobA in Teaneck, N.J.?
Question: What are the implications of the intranets for Lotus Notes --and for IBM's huge investment in that product?
ACORTESE: I think IBM and Lotus have done a very good job so far of keeping Notes relevant in an Internet world. Right now, it gives you security and other features that you just can't get [with Web software].
Forrester0: Mike Zisman is doing the right thing. The question becomes, though, whether IBM will let him act as quickly as he needs to in order to stay up with both Microsoft and Netscape. Netscape will respond very quickly to Microsoft's devaluing of the internal Web. I think that Lotus must realize that the client software game is over. The only way they can survive is to target the high-end server market, where it can handle complex content.
ACORTESE: I think that Lou Gerstner realizes that. Paul, how do you think Netscape will respond? Perhaps you just answered my question.
Forrester0: Netscape will likely target both the low and high ends. The company's Web site is already handling 40 million hits per day. If that isn't resilient, I don't know what is.
ACORTESE: Paul, what do you think Netscape's long-term prospects are?
Forrester0: I think it will be a two-horse race in the intranet. The guys at Netscape are some of the best marketers in the business right now. They will not give any quarter to Microsoft. Lotus and Novell are at a serious disadvantage.
JackBW: Here's another from New Jersey, from MikeMerc.
Question: Do you think it's possible that employees will find themselves overwhelmed by info on intranets in the same way lots of people feel about the Internet? Do you think companies have to be selective about what's available?
Forrester0: This question begs another question: How will people get their work done if they are distracted by the Web at their desk? The answer is: They must have clear metrics -- as they should have done before they had the Web. It will take some time to learn the tool, but management must be patient. The potential gains are enormous.
ACORTESE: I think that it is quite possible people can get overwhelmed by the info available on intranets.
JackBW: As usual in a Net discussion, the security issue comes up.
Question: How secure are intranets -- i.e., can anyone who stumbles across the right URL get into one?
Forrester0: Security on internal networks has always been an issue. Companies hire security guards to man the doors. A company's connection to the Internet is no different. I look to companies like Open Market to provide solutions there. They are working on ways to let contractors and others into corporate networks.
ACORTESE: Firewalls -- the software that keeps intruders from getting into a corporate net -- are pretty good right now.
Forrester0: Most of the firewall vendors out there -- Checkpoint, Sun, Digital, TIS, and Raptor -- have adequate access security to keep the bad guys out. The next step is letting people IN to corporate intranets.
Question: What companies (Microsoft, Netscape, etc.) stand to benefit most from supplying the new intranet business?
ACORTESE: I think the companies that are entrenched in corporations today -- IBM, Microsoft, and Sun, to name a few -- are very well positioned for the intranet market, which, after all, is really just an extension of existing corporate networks.
Forrester0: I really think it is between Microsoft and Netscape at this point. Microsoft sent everyone's business plan to the shredder by giving away product on NT and at the desk. IBM must respond much more aggressively than it has done. IBM, for example, is still trying to sell a browser at $25 each without a free download sample or beta versions. The company is still shooting behind the target.
JackBW: Daryn DeZ in Dallas has a question about the intranet's impact inside a company.
Question: For which departments will intranet have the most impact, and why?
JackBW: Any differences you see or expect?
ACORTESE: Intranets can benefit just about any department you can think of.
Forrester0: Most of the applications are dirt simple. They do not require a high level of expertise. That plays well to a broad range of applications for human resources, telecom, and others at an information dissemination and administrative level.
JackBW: Paul, this looks right down your alley.
Question: What's your guess as to the potential of intranets for boosting productivity and enhancing new-product development in big corporations?
Forrester0: Let me give you a simple example. The telecom administrator who handles the company phone book is constantly plagued with updates. Suddenly, he can create a simple list that is accessible by all employees night or day that is updated daily.
ACORTESE: Or there's the case of Ford, which uses an intranet to link design centers around the world to design its cars around the clock.
JackBW: Try this one next from Weber in Philadelphia.
Question: What technical hurdles must be overcome before we can have live video, simultaneously as is the dream with phones, on the Internet or intranets?
Forrester0: Keep in mind that Netscape just bought a little company called InSoft. What do they build? Video over LAN software. It is clearly Netscape's intention to build real-time videoconferencing and data conferencing into its Web products.
JackBW: WCiminelli asks this one. He's in the Rochester (N.Y.) area.
Question: My own experience at Nortel is that we cannot get applications up fast enough. What tools are becoming available so that I do not have to depend on speciaized knowledge?
ACORTESE: Web development tools are flooding the market! At a recent industry conference, Demo 96, just about all the products featured were tools that masked the complexities of HTML (the Web format) and, more interesting, tools that link intranets with corporate "enterprise" systems and databases.
JackBW: This one has Paul's name on it.
Question: Paul, what percentage of BW 1000 companies have intranets? How quickly do you think these networks will spread?
Forrester0: We found that 22% of the companies we surveyed in December were already up in production. In addition, another 40% had put the idea seriously on the table. We even found two people randomly sampled who had new job titles: "Director of Intranet Development."
ACORTESE: I came across a lot of that as well. I also found many companies that have begun hosting Web days to educate employees and promote their intranet efforts.
Forrester0: In addition, we think that 1996 will probably put the number of companies up and running with intranets in the range of 50%. That's an extraordinary ramp.
ACORTESE: I just wanted to point out again, that the reason the ramp up is so fast is that it takes very little for a company to put up an intranet -- they have most of the pieces in place already.
JackBW: This member of the audience sounds as if he has had some experience.
Question: I wonder if you aren't downplaying some the level of expertise needed to create -- and then maintain -- a full-blown internal Web site. Doesn't there need to be some pretty savvy centralized administration to make sure pages link correctly, etc.?
Forrester0: What's interesting from my point of view is that most of the network architects in large corporations have moved on from building routed internetworks. Many have moved on to managing a group that is building the intranet. The Web is a talent magnet within MIS these days. Routers are not.
ACORTESE: Your observation is correct. Intranets, like anything else, have to be managed. Fortunately, there are software tools to help out there as well. A few that come to mind are Adobe's SiteMill, which manages links between Web pages, and Computer Associates is extending its Unicenter network management program to include Web servers. There's lots going on in that area.
JackBW: Managarm in Arkham, Mass., asks this.
Question: Do you see companies going for gophers as an intermediate step to intranets?
Forrester0: No. Most companies will be building their own content directories so employees can find what they need on intranets. If you think about the task that DEC's Alta Vista or the guys at Yahoo are wrestling with, cataloging the content of an intranet is child's play.
JackBW: Paul, WCiminelli comes back with a question you may be able to answer.
Question: Are there any surveys that list the most popular uses of intranet-based applications? If so, where can they be gotten?
Forrester0: Not yet.
JackBW: You can read the BW Cover Story -- if you haven't already -- right here online.
Forrester0: The best source out there today is the business press, not the trade press.
ACORTESE: In my informal survey of companies, human resources and corporate communications are very, very popular uses of intranets.
JackBW: Crawleyp sends this question.
Question: Will the increased use of intranets stimulate the demand for new communication hardware? If so, what types?
JackBW: What do you need besides a computer and a modem and a browser?
Forrester0: Yes. I believe you will see services like directories and DHCP (to hand out IP addresses) built into switches and routers in the network. Security will also become a built-in hardware-based service. Cisco and others will subsume the firewall market.
ACORTESE: But more than anything, intranets are going to spur demand for general-purpose computer servers, from Sun, SGI, HP, Compaq, and others.
Forrester0: Absolutely. In addition, I fully expect Cisco and others to build in content-caching services so that far-flung sites can have content stored dynamically -- and locally -- to save bandwidth over the wide area network.
JackBW: Back to Microsoft, in part, with this.
Question: If the Internet is a threat to Microsoft's dominance of the desktop, is the intranet then a countervailing force in Microsoft's favor? Which is going to be the bigger market, ultimately?
ACORTESE: Intranets, and the Web in general, are a threat to Microsoft's dominance because they make the operating system less relevant, because a Web browser like Netscape's will run on any computer system. Intranets also let companies start experimenting more with electronic distribution of software, and the sort of "applets" that can be created with Sun's Java or even Microsoft's OLE. Nonetheless. I don't think the desktop market goes away -- at least not for a while.
Forrester0: Microsoft has pivoted very quickly to embrace the Web. Bill Gates spent 18 months in denial, but now he thinks the Web is the future. Unfortunately, now the company is in denial about the value of Java vs. OLE. Their marketing beagles are out there trying to convince the analyst and press community that Java's O.K., but it really won't get you where you want to go. I think they are wrong.
JackBW: So will the intranet replace the blizzard of paper in the office? Paperless at last? That's the final question. A quick answer from each of you, if you can.
Forrester0: Wow, there's a ringer. Two weeks ago, I threw out 50 pounds of vendor files. I no longer keep physical files. In the business I'm in, if it's not on the Web, it isn't there -- or worth knowing about.
ACORTESE: It will certainly cut down -- a lot. The important thing for companies to keep in mind is that they should not simply be adding another form of communications and duplicating efforts. Electronic information on an intranet should be replacing paper.
JackBW: That's it for tonight. Thanks, Paul Callahan of Forrester Research and Amy Cortese of BW for helping to educate us on intranets.
ACORTESE: Thanks Jack, and thanks to all of you for joining us.
Forrester0: Thanks, Jack.
JackBW: Transcripts of this and all BW Online events are available soon after the event. Thanks again and goodnight!
Copyright 1996 by The McGraw-Hill Companies, Inc. All rights reserved.
