Novell has the necessary resources to be a much more profitable enterprise but it currently lacks the vision, strategy and execution to produce respectable returns.

What they are most concerned about is his vision.

Basically, the UBR is a relic of an earlier vision for UDDI. The original vision for UDDI was as a standard that would help companies conduct business with each other in an automated fashion. The idea was that companies could publish how they wanted to interact, and other companies could find that information and use it to establish a relationship.

They're positioning on-demand as a niche offer. That's smart. If I was SAP, the last thing I'd do is validate on-demand as the biggest trend in the software industry. They'd be crazy to do that.

Red Hat is one of the best-positioned stocks in software and should be able to further capitalize on the growing demand for open source.

Our price objective is based on a 40 times PE (price/earnings) applied to our new 2005 earnings per share estimate of $1.35.