When you think about it the business potential of the Internet remains largely untapped because it's still too hard for most companies to create extended relationships across the Web. A big part of that difficulty has been the whole process of managing identities across multiple organizations. So while we all know that the Internet has huge potential for revolutionizing the way business is conducted, a lot of that potential has been retarded by the difficulties associated with identity management.

Now two companies are offering services that make it easier to overcome this hurdle by relying on services delivered over the Internet. One of them being launched today is called Symplified, which bills itself as an on demand identity company. The other is company called TriCipher, which recently launched a single sign-on offering called MyOneLogin that is positioned as a software-as-a-service offering.

Both approaches essentially allow companies to outsource the complicated, yet often mundane task of identity management to a third-party service provider. This has the potential to be a boon for companies looking to extend business processes out over the Web because managing all the identities of the people attached to a particular business process has always been the weakest link in the chain when it comes to setting up extended relationships over the Web.

As a result, more often than not companies have been reluctant to leverage the full potential of the Internet for transaction business across a network of customers and suppliers. But with bandwidth now so relatively inexpensive, it's become practical for third-party service providers to manage federated sets of identities and authentications in the cloud.

The other significant potential of this approach to managing identity is that it moves responsibility for managing identity to a neutral territory. All too often over the years the people that manage the applications and the networks have fought over who should ultimately mange identity across the enterprise. The network people argue this process should take place when people access the network while the builders of applications argue that identifying and managing users is a core part of the application management process. By relying on a service that make it easier to set up federated relationships, both side could potentially have their cake and eat it too.

Hopefully, the rise of these types of services will spur a raft of innovation in business commerce across the Internet. For the most part, the Internet has been a major boon to large companies that built dedicated processes to run across the Web. With the advent of identity services on the Internet, it should become a whole lot easier for just about anybody to reliably and safely extent business process out on to the Internet for the benefit of all.