It's new but not new

It's built on XMPP

It leverages a huge amount of existing infrastructure

It's federated by default (see below).

A lot of the underlying protocol is well understood by a lot of people

It's federated

It's extensible

It's persistent

It can be "gatewayed"

It's encrypted by default

It's client independent

All of the things in the Wave demo are possible without Wave. The interesting thing about Wave is not so much the application, but the infrastructure, the protocol and the underlying concepts. Many limited collaboration apps have offered various subsets of the Wave functionality, for example, and the superficial functionality can be built using existing technology, without fancy new protocols and clients etc.A lot of people have been comparing Wave to e-mail. That's missing the point too. Wave has the potential to be as important as the Web. I'm serious. Wave is taking the web and making it interactive, embeddable, recordable, and shareable on a whole different level than what we are used to. And like most great "revolutionary" ideas it doesn't actually add all that much new:When the web arrived, hypertext systems were well known (and most of them were far more advanced than early web browsers), for example. What the web gave us was two simple innovations: A simple system for letting anyone create content, and an addressing scheme and protocol that allowed the content to be distributed world wide. But that existed - sort of - too before the web, in the form of Gopher. The web was a very tiny evolutionary step in many ways, but they were "just the right ones": The web was more chaotic and unstructured and open-ended than gopher (which was more of a distributed catalog of files), and with a number of ideas that spurred people on to extend it in all kinds of weird and wonderful ways.Wave could be similar. We have IM. We have e-mail. We have document sharing over the web. We have the web. All of the functionality of Wave can be achieved with existing technology. You can chat with your friends. You can share content. You can run shared whiteboard apps that you could interface apps to.But it's not all seamlessly integrated. That is the one deceptively small evolutionary step that Wave provides, that could very well be a big game changer. Especially since Wave does it in a very simple way.That means:Jabber / Google Talk / XMPP is powerful because anyone can set up their own server, and Google has promised the same will be the case for Google Wave - it only makes sense anyway since XMPP is built ground up to be a federated protocol, with support for server-to-server connections etc.Federation allows you to set up your own server, and so act as gatekeeper to information that is critical to you, and so makes Google Wave palatable as an intranet tool as much as an external tool - in fact, barring issues with how the clients are built there's no reason why an intranet user could not start a public wave (on a public server) for an open discussion and then break away a private sub-wave on the intranet wave server - all in the same session - to discuss with his/her co-workers.This makes Wave a potentially pretty amazing collaboration tool for situations where you may have multiple parties with information of both public and private nature who wants to share different subsets with different parties. Systems like Basecamp allows this today (you can add other companies and users from those companies to your Basecamp setup, and control their access to your information) but it is fairly static and limited to the specific feature-set of Basecamp, while in Wave it is a feature of the infrastructure and completely orthogonal to the functionality the various users employ.In fact, nothing stops users from granting access to their own, internal, Wave-enabled apps, on a user by user basis as part of collaboration (or as a general service):Imagine a booking agent (at any type of business: restaurants, airlines etc.) that answers live questions. Lots of companies do that now. But instead of just talking to you, the agent shares a booking form with you, and help you fill it in, live, while answering questions.Or someone at your bank walks you through mortgage deals, and shows you a mortgage calculator, fills in details to illustrate the deals they are presenting, and show you graphs of your repayment schedule in real-time.Because the Wave protocol allows both sides to push relatively arbitrary content, and update it realtime, you can use it to run presentations; to edit documents together; to fill in forms together that is then updated live by automated remote services.Consider it a sort of "remote terminal" you can run applications in. Only it's shared. And graphical. And has built in playback.The Wave server is responsible for maintaining a persistent store of the waves. Depending on your wave server there may be different policies for how long they persist, but due to the openness of the protocol, there's plenty of opportunity for archiving waves in ways that provides a record the way e-mail does. Providing search and retrieval functionality for local waves is possible, and the architecture allows searching either at "point-in-time" or building search functionality that would let you search in past states of your waves.I.e. your client or your local wave server could either snapshot waves at specific times, or maintain a complete record of the wave operations and then let you find that mention of doughnuts in the kitchen that some greedy co-worker deleted seconds later.Many of the more exciting uses of Wave allowed by the open architecture is that you can create two-way gateways for all sorts of content using it. Nothing is preventing you from building wave support into your new spreadsheet app, for example, so you can click a button to share the spreadsheet, or a graph from it, or whatever, with other people and have them help you edit it,and comment on it. Or you can share your word processor document in a phone conference and people can add their own comments. Or you could export your blog entries, and have people use Wave to add or read comments from your web page. Or Wikipedia could export every page as a wave so those obnoxiously formatted "talk" pages could instead consist of people adding comments "inline" to the actual text. Or you could turn it into an IRC client. Or Facebook could turn the walls into waves and let people read/post to their wall via wave (though given facebooks past behavior in banning people who post too many updates, perhaps not).Google itself has a suite of apps that could be exported as waves: Docs/Spreadsheets, Gmail, Picasa, Calendar etc. - imagine starting a wave, pulling in a document, adding your pics from Picasa, dragging in the calendar and creating an event, and turning it all into a nicely formatted event invitation e-mail that is gatewayed out via normal e-mail to your friends and family (or made available as a wave to those who use it), complete with nice pictures from the place you're inviting them too, the price list from Docs, a calendar invite etc.Encryption by default makes it a lot easier sell as a collaboration tool also internally in businesses, or even in many cases as a replacement for e-mail or other channels that are insecure by default and takes conscious actions to secure.While Google obviously has a head start, and while extensions may (or may not?) be client dependent, nothing stops other parties from building Wave clients that add new capabilities. The underlying protocol is really simple - it uses XMPP for federation and layers a thing layer of maintaining shared XML documents and serializing multi-party updates to that document to all participants. How the client (or the server) interprets that document is up to the client (or the server).Some ways to use this: "Load" snapshots of waves into your word processor when you've finished collaboratively editing it, and finish cleaning it up (your word processor could be a wave client); open a wave in Finder / Explorer and drag images from the wave somewhere else (or open the wave in Photoshop and pick an image to edit). All of course assuming the various app gets wave support.