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Portal is a web-based application, and so, it run inside an Internet browser. A single page of a Portal that you view inside the browser, usually consists of many web applications that occupies sections of the portal’s page. Those sections can be seen as boxes which are called portlets. A portlet is actually a web-based application that run within the container which is a Portal.
From the Portal point of view, when we developed an application, we are creating a Portlet. This Portlet then, shall be put inside a Portal application where it will run. A portlet cannot be run by it’s own. It’s need a container, that is the Portal to be able to run.
Portlet can be a kind of small and simple application to a big and complex application. As an example, a ShoutBox is a small portlet application. Then, it can be as big as a full fledge system, such as Student Administration System. But anyway, the best practice is, make it simple (and small). So, if you are creating a big system, do not create a single portlet for such a system, but divides the big applications into smaller applications that can be created as smaller portlets. Then, arrange those portlets inside a Portal to become a full fledge big application.