»   Scott McNealy tells industry analysts why Sun is positioned for growth in 2006

When you hear the word "sharing," what comes to mind? Altruism? Charity? Philanthropy? In the years to come, I predict when business leaders think about "sharing," they will have a significantly different take than what they do today. For the enlightened and entrepreneurial, the definition of "sharing" is already broadening in new and surprising ways. Value. Opportunity. Growth.

Business models throughout the 20th century were about protectionism. The empires of the era were built on the premise that knowledge, ideas, and processes, "the crown jewels," were always something to be locked in deep dark corners of the enterprise. A whole category of lawyers developed whose sole mission was to construct layer upon layer of protection, insulation, and propriety around those gems.

From time to time, forward thinkers posed the idea that less protection and insulation would be more beneficial — that building communities and sharing intellectual resources could accelerate innovation and growth. That communities could create whole new marketplaces that would create new economic opportunities.

This concept has been slow to take off given the traditional opportunity costs associated with sharing your ideas. How do you connect interested groups, and how will they interact? How do you safely distribute and receive knowledge? How do you derive value from these communities if you're not attaching a price tag to the price of entry? And for those beholden to the Street, when and how much value will sharing create for shareholders? For most, it has simply been easier and more intuitive to go it alone and keep the crown jewels locked up.

While that model may have worked in the Industrial Age and flourished in the Information Age, it will be the kiss of death in the Participation Age.

The Participation Age Is Happening
For years...actually decades...you've heard me tout "The Network is the Computer." That barriers to the global network will drop like flies. That far-flung marketplaces will be compressed into a single, seamless body. That the network will stitch everything and everyone together. And more recently, that we're moving into the Participation Age. Look around you...it's happening.

Several million new users are joining the online world each week. Online business grows exponentially year after year. Just look at the consumer spending part of the economy — ComScore reports that U.S. non-travel spending online during this 2005 holiday season reached $19.6 billion, up 25 percent from the previous year, with total online spending for 2005 hitting $143.2 billion. That's an increase of 22 percent over 2004. Looking ahead, Forrester Research is predicting that annual North American online consumer sales, including auctions and travel, will grow at a 14 percent clip to hit $329 billion in 2010. This is a market that didn't exist 20 years ago and now enables hundreds of billions in transactions. That's the power of the network. That's the Participation Age.

The dawn of the Participation Age has triggered the need to rethink business models. The global network has rendered the practice of business protectionism and the art of hoarding knowledge and innovation as outdated. Moreover, the Participation Age is enabling companies to build communities, harness the power of groups to spur innovation, launch new marketplaces, and drive value with those.

As those of us in the technology industry are finding, the currency of the Participation Age is trust. And trust is built through sharing and authenticity. Analysts such as Frank Gens at IDC contend that the "go it alone" model will fade and that companies should adjust their business practices to mirror the sharing model. As professor Yochai Benkler at Yale University wrote in his recent paper "Sharing Nicely," this structure works because sharing and cooperation benefits all — including the person who shares in the first place.

Consider the way Google and eBay work. As everyone knows, these companies give away — or share — services, yet both are growing and profitable. The reason? They've built communities that trust their services and always come back for more.

Being Competitive in the Participation Age
What can sharing get you? Think beyond simple revenue. Think loyalty, think brand extension, think shared innovations. We're seeing the sharing model take hold in various areas in technology. Open source software is on the rise. Developer communities focused on Java technology, NetBeans, Linux, and other technologies have revolutionized the industry. User collaboration and jointly developed innovations are driving stronger product development, more attractive products, greater demand, rising loyalty... and yes, increased sales and profitability.

Being competitive in the Participation Age requires that companies evolve their cultures and rethink their business models. Easier said than done, but keep three guiding principles in mind:

• Share: Blend internal assets with those outside the four walls. That means sharing things you value — like intellectual property, best practices, employee time and more. Even your thoughts — think blogs, podcasts and wikis.
• Build trust and foster communities: Adopt a transparent and shared approach to business. New business opportunities will arise that you, the trusted player, will be in the best position to leverage.
• Engage and collaborate: Seize opportunities to listen to and interact with the communities you create. Solicit input and recommendations. Respond to requests. Close the gap among your critical audiences, influencers, and decision-makers across your organization and you will be rewarded for your attention.

Shifting your business to leverage the sharing strategy isn't easy and won't happen overnight. Cultural evolution on the fly isn't sustainable, nor is it authentic. That said, the communities you seek to develop will recognize your efforts and help you if you're straightforward with them. Instinctively, they will trust your intentions and respond, guiding your organization through the process. That trust and engagement will spark collaboration, innovation and, in the end, value.

As the economic advantage of sharing becomes clear, I challenge you to look at your company's future a bit differently — share, participate, and profit by building a community!