(FORTUNE Magazine) – Any kindergarten teacher can tell you that sharing is a virtue. And while we may not have exactly embraced the notion in our short-pants days, the idea is back--in a way that even has the flat-lined Silicon Valley all aflutter.

In the high-tech version of sharing--known as collaborative software--colleagues, customers, suppliers, and others are enabled to work simultaneously on the same document, chart, or illustration. The idea has been around in theory since the pre-Internet days of electronic data interchange. But with the advent of the Web--yes, there's still reason to celebrate the Web--collaborative software has become a reality. Indeed, if Wall Street can crank up its IPO machine again, the phenomenon might just produce some winning companies for investors.

One sign that the trend is worth watching: Ariba's proposed takeover of San Jose-based Agile Software, whose products connect manufacturers with their suppliers. Agile's $70 million of sales in the past four quarters apparently got Ariba so hot and heavy that it forked over $2.6 billion of stock to buy the company. The swoon in Ariba's shares since the deal was announced in January has pushed down the value of the deal to below $700 million. Still, it shows what strategic investors will pay to get into this new game.

Why all the excitement? Collaborative software lets businesses profit from the "community" concept that consumers have been exploiting for some time. Such tools allow companies to push their manufacturing and distribution "outside of their own four walls," explains Brent Thill, a Credit Suisse First Boston analyst in San Francisco. Ultimately, that brings down costs and pushes margins way up.

Champions of the concept say collaborative software will actually strengthen the traditional distribution channels that new-economy types have long scorned. Instead of eliminating their distribution partners (as was the mantra a year ago), says Morgan Stanley analyst Chuck Phillips, companies can "optimize" their new shared channels to discover a lot more about customer demand. Phillips cites Click Commerce, a Morgan Stanley client, as an example of a company that's capitalizing on the concept--though he recently stopped recommending the stock. The analyst warns that the market won't be ready for collaborative software until the sales environment improves for enterprise software in general.

One of the first clues to whether the market is ready to turn, in fact, may come with the IPO of Plumtree Software of San Francisco, a strong niche player that filed last September to go public and is waiting for an opportune time (in a deal led by Credit Suisse). Plumtree, which creates limited-access Web portals for such companies as Ford Motor and Ames Department Stores, sold $30 million of software in 2000, on rather plump gross margins of 61%. No profits yet, but if this little company flies--its implied valuation is $400 million, based on a proposed price range of $13 to $15 a share--it could signal that the market's welcome mat is out again.

Also keep an eye on Datasweep, a venture-backed firm in San Jose that makes what it calls "real-time collaborative manufacturing and repair solutions." Customers, such as contract manufacturer Flextronics and semiconductor equipment maker KLA-Tencor, use its software to track what's happening throughout the manufacturing process. The company has no immediate plans for an IPO.

Not surprisingly, there's a familiar bogeyman that could frighten any small company with big ideas about collaborative software. Part of Microsoft's planned new Office XP (for "experience") offering is a product called SharePoint Team Services, which provides a secure Website for co-workers to view changes, schedule meetings, and the like. And later this year Adobe Systems, famous for its Acrobat and PageMaker software, is planning to introduce Adobe Studio, a subscription Website that lets users track projects, view mockups, manage vendor invoices, and handle other design processes.

So go into the collaborative game with open eyes and a strong stomach. I penned a love letter at TheStreet.com on Valentine's Day, singing the praises of Parametric Technology, a gritty software company that supplies the mechanical computer-aided design business. Parametric has a new, fast-growing division, Windchill, devoted exclusively to collaborative software. But Windchill is unproven and, like Parametric's main business, is susceptible to the same forces as the rest of the IT sector. If corporate America isn't buying software, it doesn't matter how nifty the product; it won't sell. Parametric's shares are off 27% since my favorable mention.

Think of this piece as a giant yellow Post-it: Consider collaborative software when the climate changes. Remember, the seeds of the next buzz cycle are planted during the winter following the last harvest.

ADAM LASHINSKY is the Silicon Valley columnist for TheStreet.com. E-mail: alashinsky@thestreet.com.