Red Hat is putting a positive spin on a deal between Novell and Microsoft that may threaten the company's position as the leading supplier of Linux.

In a question-and-answer response on its website to the co-marketing, technology and indemnification alliance announced Thursday between Novell and Microsoft, Red Hat said that the deal "means Linux has won."

"It was inevitable. The best technology has been acknowledged," Red Hat said. "The relentless march of open source is shaking up the industry by freeing customers from proprietary lock-in and lack of choice."

Red Hat also scoffed at the financial deal between Novell and Microsoft that involves up-front payments from both companies in exchange for a release of patent liability. Additionally, Novell also will make running royalty payments to Microsoft based on a percentage of revenue from open-source products.

"An innovation tax is unthinkable," according to Red Hat's statement. "Free and open-source software provide the necessary environment for true innovation. Innovation without fear or threat. Activities that isolate communities or limit upstream adoption will inevitably stifle innovation."

The company also used its response as an opportunity to promote its own programs that protect customers from possible patent-litigation for technologies found in its Linux distribution. Part of the alliance between Microsoft and Novell protects SUSE Linux users from any threat of patent litigation from Microsoft.

Most analysts agree that the deal gives Novell a slight edge in its rivalry with Red Hat in the Linux market.

"Microsoft has basically said, if you must run Linux in a virtualized environment ... please use Novell's SUSE Linux," wrote Goldman Sachs & Co. analyst Rick Sherlund in a research note on the deal. "Novell gets a much-needed marketing boost given the relatively low market share of SUSE Linux."

A competitive edge for its biggest rival comes at a particularly bad time for Red Hat, as Oracle dealt the company a blow just last week when it said it would begin selling technical support for Red Hat's Linux distribution. The move both validates Red Hat Linux while undermining the Linux distributor's own support and maintenance business.

Andrew Brust, chief, new technology for US technology consulting firm twentysix asked; "Can this move have a long-term effect of diminishing Linux’s importance, by allowing Windows into the SUSE shops? Sure," he said. "Each camp may feel they have the best OS and that the best OS will win. And at the very least, the two should productively, if not peacefully, coexist."