This is going to make web application development very interesting ... and by that I mean challenging. I'm sure that ASP.NET will end up hiding this functionality under yet another layer of abstraction (abstractions upon abstractions ...) but at the end of the day there are a lot of gotchas with this sort of application that developers will need to deal with, not least being the change in user mindset that is required. After all, where will user data actually reside?
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There will also be problems in bandwidth poor nations like Australia, where users find their internet bills going through the roof because they are suddenly downloading copious amounts of data during asynchronous data updates with their favourite web applications. Yes, the technology should save bandwidth in some scenarios, but I'm willing to bet a dozen KK donuts that it will leave most users with heftier download numbers than they had previously. At least Google will probably eat its own dogfood with Gmail as one of the obvious first apps to apply Gears to (Google Reader actually looks like the very first one to offer this functionality).
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