An extranet is a controlled private network allowing customers, partners, vendors, suppliers and other businesses to gain information, typically about a specific company or educational institution, and do so without granting access to the organization's entire network. An extranet is often a private part of a website. It is restricted to select users through user IDs, passwords and other authentication mechanisms on a login page.
An extranet requires security and privacy. These can include firewall 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. Companies can use an extranet to:
- Exchange large volumes of data using Electronic Data Interchange (EDI)
- Share product catalogs exclusively with wholesalers or those "in the trade"
- Collaborate with other companies on joint development efforts
- Jointly develop and use training programs with other companies
- Provide or access services provided by one company to a group of other companies, such as an online banking application managed by one company on behalf of affiliated banks
- Share news of common interest exclusively with partner companies
Benefits of Extranet 
The objectives associated with an extranet are really no different than those associated with an intranet. Depending on your scenario, each one of these five pillars will have varying levels of priority and desirability.
- Engagement: While your external parties and groups may not be official employees, they are still valuable members of your organization. An extranet can help them immediately feel engaged and connected to your organization and your people.
- Business Efficiency: An extranet can serve as a joint project management system where responsibilities and tasks are tracked and organized. Also, by leveraging forms on your extranet you can create relevant workflows that benefit both the organization and the external group.
- Communication: An extranet can serve as a location for keeping external members updated on important news and events. And assuming your extranet has built-in analytics, you can easily measure the effectiveness of your communication.
- Collaboration: Depending on the role of your stakeholders, they may require extensive debate and collaboration with each other, or with an employee. An external site provides a safe and secure space for sharing and collaborating on important documents with external groups.
- Knowledge Share: Your external parties likely have areas of expertise unique to them—especially in committee type scenarios. An extranet can help these experts easily share the information inside their head while making it easier for others to locate that information.