The business possibilities of the Internet are increasingly seen as just that - business.
For all the hype about consumer transactions via networks of personal computers, intranets - networks built on open Internet standards, but for corporate purposes like E-mail and work-group collaboration - are where the real action is.
"There is a growing belief that the growth of the intranet will dwarf growth of the Internet," said Ruthann Quindlen, general partner at Institution Venture Partners, a Silicon Valley venture investment firm. "Corporations are looking at intranets as a technology gift - a way to dramatically improve productivity and make their employees self- sufficient."
"It isn't yet clear that the Internet meets consumer needs, but in the business setting it clearly does," said Roger Siboni, national managing partner of KPMG Peat Marwick's information, communications, and entertainment practice. Intranets "provide instant access to essential information about products, prices, and customers." They also facilitate the integration of diverse computer systems and data bases, and hence "the decentralization of information to create powerful, knowledge-based organizations."
A recent study by O'Reilly & Associates found more businesses using intranets than public Internet sites. More than a third of major corporations operated at least one internal Web site.
This is not news to influential Internet vendors like Sun Microsystems and Netscape Communications. Despite the publicity surrounding popular Web software like Netscape Navigator, these organizations have done most of their business in what they call enterprise computing.
Intranets can become the basis for expansion into business-to-business commerce, and eventually consumer sales, but intranets are keeping these companies plenty busy for now.
Netscape's first-half revenues of $131 million, more than five times the 1995 figure and yielding operating income of $9.4 million, "demonstrated the strong reception by corporate customers to the Netscape open software platform for building intranet applications," said Jim Barksdale, the company's president and chief executive officer.
He noted that through alliances with companies like Hewlett-Packard, EDS, IBM, and Informix, Netscape is focused on delivering "full intranet and Internet solutions to enterprise users."
"Everyone is obsessed with the vision of the Internet as a mass market," said Tim O'Reilly, president of O'Reilly & Associates, a Sebastopol, Calif., company known for its WebSite server systems.
O'Reilly's customers include Eastman Kodak, Unisys, Digital Equipment, and the Medical University of South Carolina; an intranet is a major component, if not the only one, of the systems it has built for each of them.
"Whether you believe the Internet has 10 million or 30 million users misses the point," Mr. O'Reilly said. "The Internet has always been a 'network of networks,' an aggregation of many small groups into one larger whole.
"In a way," he added, "the Web is the first technology that's starting to create the 'paperless office' vision that was so prevalent in the 1970s." With intranets, "all the hype is stripped away and you get down to the basics of what this technology excels at: connecting small groups of people with common interests."