Internal Web Monitoring is done from within your own data center using your own infrastructure. The most basic form of monitoring in this category is basic availability monitoring. For these tools, availability is binary. Something either works or it doesn't. These tools frequently send a small request to an infrastructure component (webserver) and if it responds the system is considered to be up and running, if it doesn't there must be something wrong and needs to be fixed. A slightly more advanced approach will also measure the time required until the answer is received.
The big advantage of these simple tools is that they are often free or very cheap. The big disadvantage is that a modern website often consists of a great number of heterogenuous components that each have their own characteristics. For example if you have four webservers and one isn't working the impact on your business is probably low and you can take your time to fix it. On the other hand, if you have a single load balancer in front of your four webservers and that one isn't working, then you probably need to do something immediately.
Now imagine that you need to monitor around fifty components (which in reality is really not a lot...) with a tool like this. That means that you need to know each component and you need to understand its role in the full value chain. Even with all the monitors running continuously, you still haven't got an idea how your service is really doing or what response times your clients are receiving.
The next group of tools doesn't monitor network connections or IP Adresses but single web pages or business transactions. These tools are clearly more sophisticated than the one we discussed above. These tools will monitor your website much more from a clients perspective. They will automatically hit all the underlying infrastructure components and the information you receive will usually cover everthing as long as it sits inside your firewall. This means that the information that you receive is easier to understand and to analyze. It is important that you understand that this type of monitoring still doesn't take into account any delays that are caused by the internet (latency), by bad peering agreements between network providers or ISP's. Another thing to be aware of is that if you are using a Content Distribution Network (CDN), the positive performance impact of that will not be visible as your internal measurements will not use this.
Internal web monitoring is always a good starting point and it is usually part of the standard services that are provided by either your internal IT department or your external service provider or hosting company. Due to the very technical nature of some of these solutions, data is not always easy to understand and this why It is often reluctant to share it with the business. For some internal applications, intranets and extranets this is the only way to monitor performance as these are not accesible from the Internet.
In some cases the tools that you can deploy for this kind of monitoring can be identical to those that are used for external monitoring, our next subject.