Novell and Digital Research Finalize Merger

Integrating Network & Desktop Operating Systems for Computer Users

Provo, Utah -- October 29, 1991 -- Novell Inc. (NASDAQ: NOVL) and Digital Research Inc., a developer of advanced operating system software including DR DOS 6.0, Multiuser DOS and FlexOS, today announced that the shareholders of DRI have approved the merger of Digital Research with Novell.

Under terms of the merger, all outstanding shares of Digital Research stock were exchanged for 3 million newly issued shares of Novel common stock. Digital Research will operate as a wholly owned subsidiary of Novell.

Through the DRI merger, Novell is acquiring general purpose DOS operating system technology designed to support the more than 70 million computer users who work with DOS-based applications running on desktop to palm-top computers. Novell is also acquiring a leading supplier of multiuser, realtime, multi-tasking operating system technology used in industrial automation, process control and point- of-sale systems worldwide. Major customers include FANUC, Fujitsu, IBM, ICL, Johnson Controls, Siemens and TEC.

"The experienced development team at Digital Research, and the value of their operating system technology to computer users, extends Novell's ability to respond to customer demands for closer integration of desktop computers with other computer resources on the network," said Ray Noorda, Novell's president and chief executive officer. "With tighter integration between desktop computers, computer networks and host computer systems, users gain simplified and easier to manage computer environments."

"DRI significantly expands Novell's role as an OEM supplier of operating system products whether general purpose, multiuser, real- time, network service, or peer-to-peer network sharing," added Noorda. "This diversifies and complements Novell's decade long development of a broad international distribution channel that includes resellers, systems integrators, major computer manufacturers, and specialized systems consulting and engineering groups."

Dick Williams, president and chief executive officer of Digital Research said, "As part of Novell we see a real opportunity to help change the way the industry thinks about operating systems and even computers themselves, and importantly, how we respond to customer interests in creating seamless network computing systems. We also believe we can help increase the presence of Novell's NetWare in demanding real-time computing environments where DRI is especially strong, such as industrial automation and process control." With the merger, Williams becomes a senior executive at Novell.

Digital Research brings two new software engineering centers to Novell. In Monterey, Calif., DRI develops graphical user interface technology and FlexOS, a real-time, multi-tasking, multiuser operating system for the Intel family of microprocessors. Novell expects DRI graphical user interface technology to accelerate its implementation of advanced GUI capabilities within network-related products. FlexOS combines general purpose operating system ease of use with real-time, transaction oriented capability necessary for point-of-sale, and industrial and process control systems.

In Hungerford, Berks, United Kingdom, DRI develops its general purpose operating system family of products, including DR DOS, DR Multiuser DOS and Concurrent DOS, DR DOS is translated into most major languages.

Last week, at the COMDEX/Fall computer trade show, DR DOS 6.0 won the "Oscar" of the computer industry, being named "Best of COMDEX/Fall" for utility software, one of eight award categories. The awards honor outstanding new computer products at COMDEX, and are awarded by the editors of BYTE Magazine and The Interface Group, the producers of COMDEX.

DR DOS reaches customers through software distribution channels and through more than 250 OEM vendors, the majority of which are based outside North America. These include Vobis, the dominant PC supplier in Germany, and Printaform, which sells more than 50 percent of the PCs in Mexico. Since becoming available through computer reseller channels in the United States in the fall of 1990, DR DOS has been on the best seller lists of each of its major distributors, Ingram Micro, Merisel and Software Resource.

Novell Inc. is an operating system software company and the leading provider of network service operating system software that integrates desktop computers, servers, and minicomputer and mainframe hosts for information sharing. Novell's NetWare network computing products manage and control the sharing of services, data and applications among PC workgroups, departmental networks and across business-wide information systems.

CONTACT: Susan Lider of Novell, 408-473-8665; or Toby Corey of Digital Research, 408-646-6092