Sugar collaboration is built on top of XMPP (Jabber), an open and extensible instant messaging protocol. Collaboration can use either Link-local connections, or a server.
Collaboration via a server is more scalable, but requires special Sugar support in the server.
A server can be set up using the XS school server for school deployments.
Running your own server
Two Jabber servers are known to work with Sugar.
prosody
As used by the Service/jabber Sugar Labs Jabber server.
ejabberd
See Installing ejabberd for instructions on installing and configuring.
More details on the ejabberd configuration are here: Ejabberd Configuration