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Novell Files Suit Against Microsoft; Seeks Injunction, Damages

Novell, Inc., a leader in eBusiness solutions and Net services software, today announced it has filed suit in U.S. District Court in Salt Lake City against Microsoft Corporation for making and distributing false and misleading statements about Novell and its products in violation of state and federal laws.

PROVO, Utah | October 1, 2001

Novell, Inc., a leader in eBusiness solutions and Net services software, today announced it has filed suit in U.S. District Court in Salt Lake City against Microsoft Corporation for making and distributing false and misleading statements about Novell and its products in violation of state and federal laws. Novell is seeking injunctive relief to immediately stop dissemination of the false and misleading statements by Microsoft, in addition to seeking corrective advertising, a recall of the false advertising and unspecified money damages.

Microsoft's campaign of disparagement and falsehoods appears to be its response to Novell's recent introduction of NetWare® 6, the latest version of the network operating system widely regarded in the industry as the most reliable and secure platform on the market. NetWare is Novell's premier platform for delivering Net services across all types of computer networks, storage systems and client desktops.

Microsoft's false statements were contained in a marketing piece shaped like a breakfast cereal box that it recently distributed to a large number of Novell® customers across the country. The box was headlined "Microsoft Server Crunch," and on it were printed a number of false and misleading statements, including:
       "What's the expiration date on that NetWare platform?"
       "As a result of the recent Cambridge Technology Partners merger, Novell is shifting its focus from software development to consultancy services."
       "You're left with a server platform without the full support of its manufacturer. Which means increasing costs as it rapidly becomes obsolete, forcing you to implement time-consuming retrofits."

"These questions and statements are completely false and misleading," said Stewart Nelson, Novell executive vice president and chief operating officer. "Microsoft has tried to create a fictitious end of life for NetWare to create fear and uncertainty within Novell's customer base and to discourage future customers from doing business with Novell. While corporate America has long grown used to Microsoft's bullying business tactics, with this campaign Microsoft has crossed well over the line. These misrepresentations about Novell, its products and product support go far beyond comparative advertising and we believe are clear violations of state and federal law."

The cereal-box campaign isn't Microsoft's first use of misleading statements to try to create confusion among Novell customers and the market. In April of this year, Microsoft published an article on MSN Money Central that was subsequently posted on TheStreet.com that falsely stated, "Novell recently announced that it is moving out of the software business and into the network consulting and services business." In response to a demand from Novell, Microsoft eventually modified the statement.

There is no expiration date for NetWare. NetWare has been and continues to be Novell's flagship software offering. In fact, development of NetWare 6.1 and future releases of NetWare has been underway for more than a year. Far from becoming obsolete, NetWare is a state-of-the-art networking platform, and it has Novell's full support both for currently shipping versions and versions yet to be announced.

"IDC's system software group expects that Novell's NetWare will be a player in the server operating environment market throughout IDC's current forecast period - calendar years 2001 through 2005," said Dan Kusnetzky, vice president, system software, IDC. "The new features in Novell's NetWare 6 clearly show that Novell has a vision of how it can add value to its customers' networks as their applications evolve from the traditional client/server model to a broader Web services model."

Consulting has been a key part of Novell's business for many years. Novell's acquisition of Cambridge Technology Partners dramatically elevates Novell's ability to meet the eBusiness needs of customers and deliver the eBusiness solutions customers are looking for today. In no way, however, does this remove Novell focus from software development. Cambridge consultants help clients solve complex business problems using best-of-breed technology, and in many cases that is Novell technology. In fact, it is anticipated that the expansion of consulting services at Novell will result in increased software sales and development for the company.

For more information about NetWare and to see what technology industry press are saying about NetWare 6, visit http://www.novell.com/products/netware/nw6_news.html. Examples include:

"... NetWare 6 becomes the de-facto, industry-leading network operating system for any corporate environment." NetWare 6 - sleeping NOS giant awakes, ZDNet Tech Update, Sept. 18, 2001

"The marketplace for enterprise operating platforms has traditionally been a pretty bloody battlefield - and, according to the VARBusiness Annual Report Card (ARC), last year's first-place winner, Microsoft, is now losing the channel battle to top-ranked Novell ..." Novell Crushes Its Rivals, Leaving Microsoft Behind, VARBusiness, Sept. 21, 2001

"[NetWare 6] certainly offers customers everything they're looking for: open access, reliability, scalability, and security." NetWare 6: Don't call it a comeback, InfoWorld, Aug. 17, 2001

About Novell
Novell, Inc. (NASDAQ: NOVL), is a leader in eBusiness solutions and Net services software designed to secure and power the networked world. Novell and its subsidiary, Cambridge Technology Partners, help organizations solve complex business challenges, simplify their systems and processes, and capture new opportunities with one Net solutions. Novell provides worldwide channel, consulting, education and developer programs to support its offerings.

For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Information on eBusiness and e-integration solutions from Cambridge Technology Partners can be accessed at http://www.ctp.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom.

Novell and NetWare are registered trademarks of Novell, Inc. in the United States and other countries. Cambridge Technology Partners is a registered trademark of Cambridge Technology Partners, Inc. *All third-party trademarks are the property of their respective owners.


Press Contacts

Kevan Barney
Novell, Inc.
Telephone: (801) 861-2931
Email: kbarney@novell.com



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