Over the course of the day I have been observing a torrent of good news for Red Hat. This company, which is Novell’s main rival, appears to quickly recover from an almost-simultaneous onslaught, courtesy of Novell, Microsoft, and Oracle. This recovery was not made possible owing to the immediate buybacks alone. Red Hat now boasts support from over 2000 independent software vendors (ISV’s), its stock just rose 2.36% and it received an upgrade from an analyst. To quote the relevant bits:

…we believe that there are still enormous returns on investment opportunities associated with the Open Source movement…The recent announcements from Oracle and Microsoft create an interesting dilemma for investors, however we believe that Dell, IBM and HP, etc., will stay the course and continue to support Red Hat, and the recent headlines have provided a unique opportunity to “get involved” in the Linux story.

This proves not only that Ellison’s and Ballmer’s FUD strategy cannot boggle the customer’s perception. It may also come to show that Red Hat will soon acquire customers at Novell’s expense. Not even the world’s largest software companies, as prominent as they these titans may be, can undermine the Linux industry as a whole. It is by all means reassuring.

The sun no shines over Novell’s head. Ever since the deceptive deal was made, its reputation has been gradually sinking.

Three weeks ago when Novell, Inc. announced a groundbreaking deal to partner with Microsoft to work on interop solutions between its Linux operating system and Microsoft’s, shares jumped 16%. Since then, they have given up more than half of their gains, emphasized yesterday by a note downgrading the stock to “underperform” by Credit Suisse analyst Jason Maynard, who wrote, “We do not believe the 10% appreciation in the stock is sustainable.”

Microsoft’s parallel upgrade from the same analyst seems to highlight who the winner in this partnership is. Meanwhile, an item from bizjournal.com appears to suggest that Novell has just lost another executive. Less impact for Novell equates to diminishing credence in Microsoft’s allegations and FUD.

It has already been argued that Novell’s Mono had evolved to become a legal minefield. Unsurprisingly, Red Hat excludes Mono from RHEL 5.

There are a lot of great new programs and innovations expected in Red Hat Enterprise Linux 5. The Novell-led Mono project isn’t one of them.

Mono is an open source implementation of Microsoft’s .NET framework. It recently hit version 1.2 offering the promise of improved Windows-to-Linux .NET portability.

David Berlind of ZDNet argues that, while Novell denies responsibility for or admission of patent infringements, a door remains open on the trademarks front. This is a long write-up which concludes that Steve Ballmer could go for legal pickles rather than major baseless allegations over IP.

That could be in the case. Especially since Novell, in its watershed deal with Microsoft, has taken great care to reiterate that it still believes that it has not infringed on any Microsoft patents. Why then would Novell pay such a huge sum of money (with a promise of longer-term royalities) if it really believed this? Answer? Microsoft may have presented Novell with compelling evidence that Linux (or something that Novell was distributing) infringes on its copyright. Or maybe a trademark (or a servicemark).

This is great news to bloggers.

In a major victory for bloggers, forum participants and Web publishers, the California Supreme Court ruled Monday that individuals cannot be held liable for publishing defamatory statements written by others.

Some Webmasters fail to keep track of content that’s contributed by others. At least the legal dangers are now gone.

Eben Moglen, the Free Software Foundation’s attorney, has just had an interview with The Register. Therein he explains his strategy for breaking any effectiveness of Novell’s Deal with Microsoft. Below lie a couple of snippets which were selectively extracted from the full interview.

“We’re going to make the deal not tenable and we urge Microsoft to back away as gracefully and as quickly as possible from a deal that won’t work.”

[...]

“If GPL 3 goes into effect with these terms in it, Novell will suddenly becomes a patent laundry; the minute Microsoft realizes the laundry is under construction it will withdraw.”

News just in.

Credit Suisse downgrades Novell

Credit Suisse said shares of Novell have traded up sharply after the recent partnership announcement with Microsoft Corp. The brokerage said although the new relationship with Microsoft will include a net payment to Novell, this is more of a one-time event and it does not believe the 10 percent appreciation in the stock is sustainable.

–The brokerage said the company’s Linux patent deal with Microsoft will hurt its standing in the open source community.

So, the short-term gain which Novell sought might last for a very short term indeed.