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An extranet is a computer network that allows controlled access from the outside, for specific business or educational purposes. In a business-to-business context, an extranet can be viewed as an extension of an organization's intranet that is extended to users outside the organization, usually partners, vendors and suppliers, in isolation from all other Internet users. In contrast, business-to-consumer (B2C) models involve known servers of one or more companies, communicating with previously unknown consumer users. An extranet is similar to a DMZ in that it provides access to needed services for channel partners, without granting access to an organization's entire network.
An extranet could be understood as an intranet mapped onto the public Internet or some other transmission system not accessible to the general public, but managed by more than one company's administrator(s). For example, military networks of different security levels may map onto a common military radio transmission system that never connects to the Internet. Any private network mapped onto a public one is a virtual private network (VPN), often using special security protocols.
For decades, institutions have been interconnecting to each other to create private networks for sharing information. One of the differences that characterizes an extranet, however, is that its interconnections are over a shared network rather than through dedicated physical lines. With respect to Internet Protocol networks, RFC 4364 states "If all the sites in a VPN are owned by the same enterprise, the VPN is a corporate intranet. If the various sites in a VPN are owned by different enterprises, the VPN is an extranet. A site can be in more than one VPN; e.g. in an intranet and several extranets. We regard both intranets and extranets as VPNs. In general, when we use the term VPN we will not be distinguishing between intranets and extranets. Even if this argument is valid, the term "extranet" is still applied and can be used to eliminate the use of the above description."
In the quote above from RFC 4364, the term "site" refers to a distinct networked environment. Two sites connected to each other across the public Internet backbone comprise a VPN. The term "site" does not mean "website." Thus, a small company in a single building can have an "intranet," but to have a VPN, they would need to provide tunneled access to that network for geographically distributed employees.
Similarly, for smaller, geographically united organizations, "extranet" is a useful term to describe selective access to intranet systems granted to suppliers, customers, or other companies. Such access does not involve tunneling, but rather simply an authentication mechanism to a web server. In this sense, an "extranet" designates the "private part" of a website, where "registered users" can navigate, enabled by authentication mechanisms on a "login page".
An extranet requires network security. These can include firewalls, server management, the issuance and use of digital certificates or similar means of user authentication, encryption of messages and the use of virtual private networks (VPNs) that tunnel through the public network.
Many technical specifications describe methods of implementing extranets, but often never explicitly define an extranet. RFC 3457  presents requirements for remote access to extranets. RFC 2709  discusses extranet implementation using IPsec and advanced network address translation (NAT).
During the late 1990s and early 2000s, several industries started to use the term 'extranet' to describe centralized repositories of shared data (and supporting applications) made accessible via the web only to authorized members of particular work groups - for example, geographically dispersed, multi-company project teams. Some applications are offered on a software as a service (SaaS) basis.
For example, in the construction industry, project teams may access a project extranet to share drawings, photographs and documents, and use online applications to mark-up and make comments and to manage and report on project-related communications. In 2003 in the United Kingdom, several of the leading vendors formed the Network for Construction Collaboration Technology Providers (NCCTP) to promote the technologies and to establish data exchange standards between the different data systems. The same type of construction-focused technologies have also been developed in the United States, Australia and mainland Europe.