Keynote Remarks of
Troy A. Eid, Chief Operating Officer
InfoTEST International

Sun Microsystems Computer Company
Telecommunications & Cable Summit
Dallas, Texas
April 29, 1997

hank you. About this same time last year, I was privileged to address another distiguished gathering of Sun Microsystems clients in Berkeley. I have a confession to make: In preparing for today's remarks I thought about recycling what I wrote for last year's conference. That was California and this is Texas. Besides, I figured you've never heard of me anyway, so why should you care? Meanwhile, admittedly at cross-purposes but knowing my thoughts were sinful, I prayed that the Lord would lead me not into temptation.

Well, He certainly delivered me from evil: I plowed through my speech from May 1996 and found it to be hopelessly outdated. About the only thing that could be easily resurrected were some tasteless jokes about Microsoft. At least the best things in life never change. To his credit, Mr. Gates has finally figured out that Java isn't just something they serve at Starbucks.

Past Predictions

If you're still curious, you're welcome to download last year's remarks from the InfoTEST International web site (www.infotest.com). The text talks a lot about intranets, but never mentions today's topic -- the extranet -- although in my defense the word wasn't even invented yet. By the way, the speech reads better if you skip over my predictions about the imminent and wide-spread arrival of cable modems for high-speed Internet access.

In case you're wondering why Sun invited me back at all, it turns out last year's speech stumbled upon one correct prediction: that Java would dramatically accelerate the Internet's transformation from a corporate curiosity to one of the driving forces in the global economy. If anything, that forecast wasn't optimistic enough. Information Week captured today's reality in the opening paragraph of its March 31, 1997 cover story:

Java has reached a turning point. Less than two years old, the programming language is moving from being an unproven but promising technology to becoming a reliable tool for building business-critical enterprise applications.

I'll say more about Java in a few moments. But first, let me expand on the "extranet evolution": The ongoing commercial transformation of the Net from a relatively obscure defense research and academic network, to the World Wide Web, to intranets of increasing sophistication that will soon reach beyond individual enterprises to become the primary electronic channel for full-scale business collaboration.

The Last Four Years

Looking backward, we now know that each of the past four years has been marked by a defining step in the Internet's commercial evolution. In some respects, 1993 may have been the most important but least appreciated year of all. I'm not just talking about technological breakthroughs like the Mosaic web browser, the precursor to Netscape Navigator. Nineteen ninety-three was also the year when our industry faced off against federal policymakers over the vision of a government-directed National Information Infrastructure (NII) modeled on the interstate highway system of the Eisenhower days. Fortunately, the government blinked. A Byte magazine cover story from about this time entitled, "Building the Data Highway," captured the viewpoint that has since prevailed:

One fact must be made clear about the National Information Infrastructure: The government is not planning to dig a trench from New York to San Francisco, fill it with fiber-optic cables, and call it a data highway. Rather, the information highway will be privately built, owned and operated. . . . In fact, much of the data highway already exists in the vast web of fiber-optic strands, coaxial cables, radio waves, satellites, and lowly copper wires now spanning the globe.

Note that in keeping with the conventional wisdom of the early 1990s, Byte's expansive definition of the data highway never mentions the Internet. The 16-page article eventually mentions the Internet, but predicts that "[a] unification of phone and cable systems could bypass the Internet and threaten its relevance. . . ." The really important point, and the prediction that Byte got right, is that the government regulators took the bus and left the driving to us. Before we knew it, the Internet was leading the development of the NII -- not from Washington or Brussels or Tokyo, but from the grassroots.

Nineteen-ninety four was the Year of the World Wide Web. Mosaic gave way to Netscape Navigator and large corporations began their rush to establish what was euphemistically called a Web "presence," which for most essentially meant putting some pages up and seeing what would happen. On a personal note, 1994 was the year I finally said farewell to corporate law practice, after waging an unsuccessful campaign to connect our 450-employee firm to the Internet. In fact, when I pitched our firm's executive committee on the benefits of joining the Internet, one of the senior partners cut me off in mid-sentence:. "But Mr. Eid," he said, "the last thing this firm needs is another health club membership."

A Newsweek cover story called 1995 "The Year of the Internet," but what they really meant was that the Web had ceased being the exclusive domain of big corporate users and started becoming a mass commodity. For the first time, most of the Web's users were people more likely to read TV Guide than Electrical Engineering Times. And that lead to a really strange development: Once consumers really started throwing money at the Internet, the number of consultants who claimed to have played a crucial role in creating the original Internet and its predecessor, the ARPANet, mysteriously began growing exponentially from a handful of people to a cast of several thousand. Nonetheless, there is absolutely no truth to the rumor that Bill Gate's book, The Road Ahead, describes the six-year old Billy writing on the chalkboard of his kindergarten class for the first time and sketching a complete network diagram for the entire Internet.

The Rise of the Intranet

Last year, 1996, will probably best be known as the Year of the Intranet. One of the best definitions of an intranet comes from John Dodge, editor of PC Week:

Intranets are private business networks running over the Internet, typically serving a single organization. They are bounded by firewalls, which is software functioning as a membrane determining who and what can get inside the network.

Virtually all the Fortune 500 companies say they have an intranet or plan to deploy one in the near future, mostly to share information among employees and to collaborate on projects. A recent survey of 52 large companies found that the number of intranet users at those companies was 5,905 in late 1996. That number is expected to more than double this year to 12,408. The intranet's competitive advantages were underscored last year by a study of four major companies by International Data Corp. showing that intranets provide an average return on investment of more than 1000 percent and pay for themselves within six to 12 weeks.

Nor is the trend limited to corporate users. For instance, the U.S. General Services Administration -- the federal government's landlord and civilian procurement arm -- now provides intranet access to its entire workforce. Not surprisingly, the market for coordinating the development of additional intranets is about to explode. According to one estimate, the global intranet market will grow 122 percent per year through the year 2001, when it will be worth nearly $22 billion.

The Year of the Extranet

This year is shaping up as The Year of the Extranet. Internet World/Spring '97 was marked by a series of extranet announcements by several major vendors. So popular are extranets that The Wall Street Journal recently felt obliged to devote an entire article to explaining how companies that prefer to market their products using the term "extranet" have triumphed over competitors that liked terms like "infranet" and "exonet."

You've probably heard the rumor that Sandra Bullock will soon star in a sequel to the movie The Net called The Extranet. Bullock's character in The Net was of course a free-lance software developer whose identity is wiped out by Internet hackers. In The Extranet, Bullock is stalked by the psychotic IS department manager of a multi-national manufacturing company, who repudiates her access to the company's Web-enabled, Java-powered distributed product data management system. In sheer desperation, Bullock is forced to cobble together her virtual team's product design schematics using Lotus notes and loses the entire contract. Fortunately, as in The Net, the producers of The Extranet manifest a sophisticated grasp of the Internet's underlying technology -- like the scene where Bullock uses a Sun workstation to bust through the company's firewalls and the workstation bursts into flames.

So what is an extranet? There is not exactly universal agreement on the definition, but here again I think PC Week's John Dodge captures it well:

[Extranets] are business networks that erase the traditional boundaries of the enterprise. Conceptually, they bind together related groups of companies known as trusted circles or affinity groups . . . [by] open[ing] up the intranet to customers, suppliers and other[s].

Like the intranet, many of the essential building blocks of the extranet have been around for years. It would be a mistake, however, to think of the extranet merely as yet another Wide-Area Network (WAN) or Virtual Private Network (VPN). Most WANs and VPNs could not venture very far beyond a single company or institution without running into system incompatibility problems. In contrast, extranets harness at least three of the Internet's greatest advantages:

1. The Internet's reliance on open technical standards.

2. The Internet's increasingly proven and cost-effective enabling technologies.

3. The Internet's large and exponentially growing user base, which MCI's Vint Cerf estimates will reach 200 million users by the year 2000.

The result is the emergence of an extremely powerful channel for business collaboration across the entire supply chain and throughout the virtual corporation of the 21st Century.

The InfoTEST Manufacturing Extranet

This may be a sweeping vision, but the extranet is about bottom-line business priorities. For example, the industry alliance I represent, InfoTEST International, is currently prototyping an extranet for major manufacturers including Caterpillar, the world-class maker of heavy earth-moving equipment headquartered in Illinois but with manufacturing sites, suppliers, dealerships and customers around the globe. InfoTEST's pilot project is called EPR, which stands for Enhanced Product Realization. Our goal is to help Caterpillar and other U.S. manufacturers use the public Internet infrastructure, and Internet technologies like Java, to respond to customer requests for product modifications -- say, design a new part for one of those big yellow tractors in Asia or Europe or Latin America -- in just five days, instead of the current average response time of up to several months.

This is a market research project for us, not a near-term commercial solution, but we're doing it for a solid business reason: to help Caterpillar and our other corporate sponsors more effectively position themselves in this rapidly evolving commercial marketplace. To give you an idea of the challenge we face, I'm told that manufacturing a single Caterpillar D-11 tractor depends on managing relationships with more than 1,300 different suppliers. Think for a moment what it would mean for Caterpillar and any number of companies if we could leverage the Internet to respond to customers' or dealers' requests for a product modification; design and test the replacement parts -- not just sequentially, but concurrently with key suppliers and virtual solutions teams; and deliver the finished parts for installation on the customer's tractor in the field, all within a single week. That is the kind of competitive edge that our customers will expect, and that the citizens of our country will deserve, in the years ahead.

The fact is, Corporate America and much of the rest of the business world is indeed evolving rapidly toward extranets. We're not there yet. But a growing number of enterprises are moving in the right direction. If the advent of extranetworking matches the pace of other defining moments in Internet history, the Day of Reckoning will probably come much sooner than any of us expect. So the question arises: Will our businesses evolve along with the Internet? Will our companies and our customers be ready to leverage the competitive advantages of Internet technologies -- as well as the public Internet infrastructure -- as commercial extranets become a reality?

'Private Internet' Services

The distinction between the Internet's enabling technologies and the public Internet infrastructure helps explain why the development of the extranet is an evolving process of continuous improvement rather than a one-time phenomena. We already know that WANs using the Internet Protocol (IP) -- often called "private internets" -- are an increasingly vital means for communicating within and across enterprises. Importantly, many IP-based WANs are capable of carrying voice signals as well as data communications. Among other things, this means using the Internet to make telephone calls via personal computer is no longer the exclusive province of starving computer science graduate students.

And to almost everyone's surprise, Internet telephony no longer poses a doomsday threat to the long-distance phone revenue generated by the major carriers: Both Sprint and MCI have recently announced plans to link circuit-switched networks with integrated voice-data IP networks. Other major carriers are expected to follow suit. Savvy telecom executives know that sometimes the best way to lead is to find a parade and march in front of it. One can almost hear the collective sigh of relief as carriers and their customers achieve cost-effective voice-data integration using IP networks -- in some cases with less pressure to use relatively more expensive technologies like Asynchronous Transfer Mode.

In the near future, several companies plan to unveil products that should boost Internet telephony using the new cross-platform Java Telephony API. Sun Microsystems is launching a development kit called JavaTel that allows users to build telephony functions, such as call control and routing, into Java-based applications. Lucent Technologies is likewise expected to introduce what it's calling PassageWay software, an applications development tool that links to any telephone system. These companies know a market when they see it: A recent survey shows that only 13 percent of companies currently are using computer telephony, but fully half plan to use it within the next two years.

Beyond supporting unified voice, fax and data communications, IP-based WANs can enable a vast range of mission-critical business applications, such as on-line billing, ordering and procurement; electronic data interchange (EDI); inventory management; database marketing tailored to individual customers -- the "market of one" -- and many others. Consequently, several leading telecommunications providers are pioneering private Internet services. Again, these are typically IP-based WANs, with guaranteed levels of security and quality of service, that can extend a company's intranet beyond its firewalls.

Proprietary Extranets

Not to be outdone, several Internet Service Providers (ISPs) -- starting with UUNET, a subsidiary of WorldCom, Inc. -- have announced what it claims is the world's first commercial extranet service. The UUNET service, called ExtraLink, enables subscribers to communicate with each other using UUNET's high-speed backbone and local access provided by MFS. Security is provided by encryption at the router level, creating a virtual private network that UUNET claims is about 20 percent less expensive than Frame Relay and "far less expensive than private lines."

ISP offerings such as the UUNET ExtraLink service are yet another important stage in the extranet evolution. However, such services should properly be seen for what they are: Vendor-specific, proprietary network services rather than true extranets. This distinction will become increasingly crucial in the coming years. The extranet's greatest potential advantage is to leverage the entire public Internet infrastructure -- and not just "private Internets" -- to do business virtually anywhere in the world with a vast and growing web of customers, suppliers, dealers and strategic partners. UUNET's ExtraLink is a case in point: It only works for UUNET customers who subscribe to the service, and it relies on UUNET's own high-speed backbone and local access provided by MFS instead of using the public Internet infrastructure.

It would be a serious mistake to minimize the value of proprietary extranet services. On the contrary, services like ExtraLink exist largely because today's Internet lacks security and does not yet support the full range of mission-critical business applications. Yet harnessing the power of the public Internet, with its vast and growing universe of users, will become increasingly attractive both as the Internet grows and as its enabling infrastructure improves.

By analogy, the breathtaking commercial growth of the Web, especially since the launch of Netscape Navigator 1.0 in December 1994, attests to the advantages of tapping the public Internet for advertising, and increasingly as a marketing and sales channel. Granted, a few companies have chosen to make all or part of their web sites accessible only to a limited number of users -- in Walt Disney's case, to paid subscribers of the Microsoft Network. Yet the overwhelming number of companies that maintain a serious Web presence are already generating substantial business value despite the Internet's current limitations. More extensive on-line business collaboration -- applications like multi-point videoconferencing over the Internet, for example -- are the undiscovered country. But I suspect some of the explorers of that uncharted world are in this room today, and what you and others will do in the years ahead will keep on defying the conventional wisdom.

Internet Commerce & the Global Economy

It is arguably no coincidence that the rapid development of the Web and enterprise intranets since 1994 coincides with the emergence of the information technology (IT) industry as the undisputed driving force in the U.S. economy for the first time in history. In the past three years, the IT sector has contributed 27 percent of the growth in U.S. gross domestic product, compared with, for instance, 14 percent for residential housing and 4 percent for the auto sector. At the same time, business spending on IT has risen by nearly 45 percent. During the past year alone -- as the number of corporate web sites has doubled every two-and-a-half months, and as enterprise intranets have become increasingly mainstream -- fully one-third of U.S. GDP growth has come directly from the IT industry. There are now more than 9 million U.S. employees in the domestic IT sector. Studies show that IT companies have a greater "multiplier effect" -- the ability to generate jobs throughout the economy -- than traditional industries like automobile manufacturing. In some cases, nearly seven additional jobs are created throughout the economy for every one new IT job.

If anything, the growth of Web-enabled electronic commerce and the extension of intranets beyond the enterprise will probably accelerate these trends. Business-to-business e-commerce today represents just 4 percent of the total U.S. Internet economy of $15 billion. But that amount is expected to rise to more than 33 percent, or $66 billion, of a total Internet marketplace that will be valued at nearly $200 billion just three years from now. Even today, several early adopters are finding they can make real money by leveraging the Internet's potential as an interactive marketing and sales channel instead of a forum for traditional advertising. In the IT industry, Cisco Systems recently announced that it will soon be the world's first company to hit an annualized run-rate of $1 billion worth of products sold over the Internet. Cisco claims that this past January, 13 percent of all its product orders came through its web site.

Nor is Internet commerce limited to business-to-business applications. For instance, Chrysler Corp. predicts that within four years, 25 percent of its sales will come through the Internet, up from less than 2 percent last year. Chrysler expects its dealerships may consolidate as savvy buyers use online resources to comparison shop beyond traditional geographic boundaries. At the same time, extranets will provide business opportunities for new entrepreneurs. For instance, a California-based company called Auto-By-Tel has already signed up 1,600 auto dealers across the United States who pay up to $4,000 a month for their information to be listed on the company's web site. Auto-By-Tel claims the referral service typically brings a 30 percent rise in sales -- all at the expense of non-Auto-By-Tel dealers.

The Role of Java

In the broader context, we are evolving toward non-proprietary extranets that can provide end-to-end, any-to-any security using the public Internet infrastructure. Within the next five to 10 years, thanks in large part to technologies like Java, these extranets will become a primary channel for doing business worldwide. We're not just talking electronic mail or EDI over the Internet. The extranets of the New Millennium will support the entire suite of mission-critical business applications that world-class companies and institutions use today, but which now depend almost entirely on proprietary systems and leased telecommunications lines.

Java is already proving to be essential to the extranet evolution in at least two ways: First, Java is demonstrating its power to perform the heavy-lifting that extranets will require. This means enabling complex collaborative programs like customer service, order entry and product data management. Second, projecting Java beyond the desktop is an integral part of Sun's overall strategy of making the same programs run on every server and beyond -- Unix, Windows NT, whatever. It will accelerate the industry's transition to open systems while helping to enable the kind of any-to-any functionality on which extranets ultimately depend.

The Challenges We Face

In the meantime, the vast majority of today's non-proprietary extranets -- including the InfoTEST manufacturing extranet I spoke of earlier -- will remain in the prototype stage. Other high-profile extranet experiments include:

* PowerAg, a pilot agricultural extranet that will reportedly be developed by Electronic Data Systems Corp. during the next six years at a cost of $26 million.

* An ongoing extranet testbed to link Big Three auto dealers supported by the Automotive Industry Action Group, a 1,200-member trade organization.

* A separate prototype extranet for Ford Motor Co. dealers called FocalPt aimed at supporting the sales and servicing of cars and trucks for Ford dealers worldwide.

These and other pilot projects recognize that at least two major obstacles must be overcome before non-proprietary extranets can reasonably be expected to evolve beyond pilot projects and into full-scale commercial production: The current state of the Internet infrastructure and the need for Internet security.

Wanted: More & Better Internet Infrastructure

In terms of infrastructure, the Internet needs to do more than sign up seemingly endless numbers of new users. It must also develop the technological sophistication and consistency to support the kinds of mission-critical collaborative business applications that commercial extranets will require. The carriers are making massive investments to upgrade the Internet's backbone. This process will accelerate as the Internet Engineering Task Force, the major standards body for the Internet, and others agree on ways to more accurately measure Internet usage among individual users.

Establishing reliable Internet traffic-metering, and the supporting billing systems, is key to encouraging economically rational pricing decisions among the Internet's various classes of users. It will also help create something that is conspicuously absent from today's Internet: guaranteed quality of service. Some users would pay more for a higher class of service to support mission-critical applications, like on-line ordering and billing processes. Conversely, those same users might accept a lower class of service for things like junk e-mail (affectionately known as "spam"). Internet traffic-metering and billing sounds arcane, but ultimately it's all about giving people choices. Once the carriers know who is using the Internet and at what cost, they can start charging accordingly, and the "right" level of investment should start flowing into the Internet infrastructure based on actual consumer demand.

Many predict that the advent of Internet traffic-metering and billing will lead to a dramatic shake-out in the ISP industry. The jury's still out. But if these predictions prove correct, the bright side for the remaining ISPs is that they will also be able to charge the economically "right" amount for their services -- again triggering the requisite upgrades in infrastructure, including higher-speed local and regional Internet access. Without accurate Internet traffic-metering, many ISP pricing decisions seem a little like trial and error. What are we supposed to think when America Online focuses on flat-rate pricing at the precise moment when Netcom announces plans to drop it entirely?

Not to be outdone by the major carriers and the ISPs, more than 100 U.S. universities have endorsed the Internet 2 project, part of the federal government's $100 million Next Generation Internet initiative. The goal of Internet 2 is to develop a broad-band infrastructure for the academic community that will be 100 times faster than today's Internet. Just as an aside, do you ever wonder if the professors behind projects like Internet 2 -- the experts who keep telling us their institutions can do for the Internet -- ever worry about what the Internet might do to them? They might want to get the March 10th issue of Forbes magazine and check out the interview with management guru Peter Drucker:

Thirty years from now the big university campuses will be relics. Universities won't survive. It's as large a change as when we first got the printed book. Do you realize that the cost of higher education has risen as fast as the cost of health care? Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis. . . . Already we are beginning to deliver more lectures and classes off campus via satellite or two-way video at a fraction of the cost. The college won't survive as a residential institution.

For his part, Drucker -- who also happens to be a professor -- is apparently the academic equivalent of Intel's Andy Grove: Only the Paranoid Survive.

There is also the issue of bringing even basic Internet infrastructure to a great many more places. This global network of networks is still located almost entirely on the East and West Coasts of the United States. Fully 80 percent of all Internet usage occurs in the continental US. And nearly 100 percent of the data passes through a continental US-based Internet Network Access Point (NAP) of one of the major carriers, such as Sprint, MCI or AT&T. This latter point struck me last year at a series of seminars InfoTEST sponsored in China. Like much of the developing world, China's fledgling Internet backbone and connections to the United States are less than three years old. And there is no NAP in China: When someone sends e-mail from Beijing to China, it must first be routed through the NASA/Ames NAP in Mountain View, California. This same absence of basic Internet infrastructure can be found somewhere on every continent. The commercialization of the extranet will shape, and be shaped by, the extent to which the public Internet is diffused throughout the strategic markets of the world.

The Need for Internet Security

The other biggest barrier to the commercial evolution of the extranet is the prevailing lack of Internet security. Of course, information security is a huge and growing problem, and not just because of the Internet. The Computer Security Institute recently surveyed 563 U.S. corporate, governmental, financial and academic organizations and found that three out of four of them suffered financial losses from computer crimes within the past year. Contrary to popular belief, most computer theft actually occurs inside the firewall. The Information Warfare Division of the Defense Information Agency recently conducted a security audit of 15,000 Pentagon systems in which vulnerabilities had previously been pointed out to systems managers for correction. Security auditors were able to gain access to almost nine out of 10 of the systems simply by using publicly available techniques. As a result, the Pentagon is reportedly telling security managers to focus less on preventing outside penetration and more on detecting intrusions and reacting with immediate shutdowns.

Yet we also must realize that the Internet raises a unique security dilemma because it is so broadly accessible throughout the world. We now know, for instance, that during the Gulf War, computer vandals working from Eindhoven in the Netherlands cracked into U.S. government computers at 34 military sites to steal information about troop movements, missile capabilities and other secret information. The bad guys then offered these secrets to the Iraqis, who fortunately rejected it because they mistakenly thought it was a hoax. As Dr. Eugene Schultz, the former chief of computer security at the U.S. Department of Energy, recently told the British Broadcasting Company:

We realized that these files should not have been stored on Internet-capable machines. They related to our military systems, they related to Operation Desert Shield at the time, and later Operation Desert Storm. This was a huge mistake.

By the way, Saddam Hussein apparently still doesn't get it. A recent editorial in the Iraqi government newspaper Al-Jumhuriya declares that the Internet, which is still not accessible in Iraq, is "the end of civilizations, cultures, interests and ethics." It also warns that the Internet is "one of the American means to enter every house in the world. They want to become the only source for controlling human beings in the new electronic village." It would be nice if all of our enemies were this stupid, but I wouldn't bank on it.

As America's national security becomes more closely tied to our economic interests, the need for greater Internet and information systems protection will become increasingly critical to corporate users as well as the government. The entire IT industry must always be realistic not only about the Internet's current security limitations, but about the overall ambivalence with which many corporate decisionmakers and government leaders regard the Internet and all it represents. A recent Deloitte & Touche survey of almost 1,500 companies around the world found that the overwhelming majority -- roughly 19 out of 20 -- have no plans to use the Internet for business transactions in the foreseeable future.

If we are to succeed in changing corporate attitudes toward the Internet, we must also recognize that leadership -- or the lack of it -- increasingly comes from the top. IT-related investment decisions are increasingly made outside the company's IS shop. A recent survey of 100 CEOs at companies in North America, Europe and South America found that managers in areas other than IT now initiate 46 percent of technology projects, while 17 percent are initiated at the board level. Almost half the chief executives surveyed said they spend more than 10 percent of their time learning about technology. Incidentally, this trend extends to the U.S. government as well: Last year's Telecommunications Reform Act established the office of Chief Information Officer within each major federal department and agency -- coordinated by an oversight board, the Federal CIO Council -- to help ensure that taxpayer-funded IT decisions would be made on a more solid business basis.

By the way, cultural ambivalence about the Internet, and about information security, extends to the highest levels of the federal government. You'll recall that the goal of InfoTEST International's manufacturing extranet trial is to help Caterpillar and other manufacturers respond to customer needs anywhere in the world. Yet our actual wide-area testing scenario is currently limited entirely to the continental United States: The Clinton Administration's current restrictions on the export of strong encryption technology means we can't even test the most promising extranet security solutions outside our borders.

This is a case where the Clinton Administration and its allies in the business community need to learn that solving the Internet security problem will require more than a technological quick-fix. We must also address the underlying business and public policy issues that are impeding the development of extranets and other promising channels for electronic communication. From a business standpoint, empowering virtual teams over the extranet will require substantial reengineering of management processes and practices. In this brave new world, your supply chain partner on one project may simultaneously be your competitor on another. The lion and the lamb can still lay down together, but only in designated areas. By way of example, providing the appropriate level of authorization and access to each individual extranet user only for the scope of a specific project -- nothing more or less -- is fundamentally a management-driven security issue, not just a question of the underlying technology and its capabilities. If anything, the development of the law and corporate policy will probably lag behind the technology. How companies respond to these and other non-technological security challenges will determine how they will benefit from extranet-related investments.

Finally, on a public policy level, I would respectfully suggest that our government ought to make it easier, not more difficult, for law-abiding U.S. companies to protect their proprietary information from being compromised anywhere in the world. At the same time, our government should place a greater emphasis on the research and development of promising new security technologies -- what the research community calls "information surety" -- as well as the gathering and processing of intelligence and other preventative measures regarding present and future threats to our information infrastructure. Taking these steps will help strengthen the development of legitimate commercial extranets that can increase American security and competitiveness.

Looking Forward

I'll close my remarks today with this caveat: As with anything involving the Internet, when you think about the extranet's problems and possibilities, always expect the unexpected. The pioneers of the extranet still face some formidable challenges. Yet if the recent past is prologue, the day is close at hand when the extranet will become as familar to doing business as the World Wide Web and the intranet are today. As those pioneers, you will continue to shatter the conventional wisdom in the months and years ahead. You'll do amazing things and do the rest of us proud.

Of course, you're not exactly making my job as a keynote speaker any easier. But truth be told, if I were fortunate enough to see you again a year from now, I wouldn't mind throwing away today's entire speech in tribute to the unexpected successes that you and your fellow pioneers will achieve in the exciting year that is to come. Thank you.

Back to Top