Is it Microsoft or Ubuntu that scared Red Hat away from the desktop?

I'm still digesting Red Hat's announcement that the company won't be focusing on the desktop market. But who is Red Hat really scared of - Microsoft or Ubuntu?

Here's the meat of the announcement:

It’s worth pointing out what’s missing in the list above: we have no plans to create a traditional desktop product for the consumer market in the foreseeable future.

An explanation: as a public, for-profit company, Red Hat must create products and technologies with an eye on the bottom line, and with desktops this is much harder to do than with servers. The desktop market suffers from having one dominant vendor, and some people still perceive that today’s Linux desktops simply don’t provide a practical alternative. Of course, a growing number of technically savvy users and companies have discovered that today’s Linux desktop is indeed a practical alternative. Nevertheless, building a sustainable business around the Linux desktop is tough, and history is littered with example efforts that have either failed outright, are stalled or are run as charities. But there’s good news too. Technical developments that have become available over the past year or two are accelerating the spread of the Linux Desktop.

The desktop market certainly does have a dominant vendor (Microsoft), but there's also a very dominant Linux distro. Ubuntu. If there's a dominant desktop distro, Ubuntu is it. Has this had a bearing on Red Hat's decision to leave the desktop? I can't but feel that it has. In a field where I firmly believe that there were too many distros competing for attention, now there's one less. That said, I did quite like Red Hat (although my favorite distro is Ubuntu).

Does Red Hat's exit now leave the desktop Linux field open to Ubuntu?

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Thoughts?