Credit Suisse analyst Jason Maynard took down Novell on Monday grading it an "Underperform." He reckons the flurry in its stock after its alliance with Microsoft was based on a "one-time event" - Microsoft paying Novell $308 million net - and that the 10% appreciation in the stock isn't sustainable."

"Rather than provide a growth engine for the company," he wrote in a note:

"We think Novell's Linux patent deal with Microsoft will hurt the company's standing in the open source community. We don't see Microsoft providing a sustainable lift to Novell's distribution woes. With Oracle entering the market, we doubt there will be enough room to support needed Linux market share gains. Finally, Novell's legacy NetWare business continues to decline, and the level at which revenue can be sustained is unknown."

Maynard figures Novell will spend Microsoft's money on acquisitions, both to diversify and to support its systems management and identity interests. He also figures Novell will restructure again but without any material upside.

He says the scenario reminds him of "elements of the NetIQ & Microsoft systems management deal a few years back. In that case, NetIQ received cash from Microsoft but the deal turned out to be a one-time event. The company didn't have a clear and focused strategy and despite making acquisitions, could not sustain growth in its business. We think Novell looks like a company in the same situation."

With Microsoft's money in the kitty, Novell has roughly a billion in cash.

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