Press Release

Nortel Networks and Novell Team to Deliver Directory-Enabled Networking to Enterprise Networks and the Internet

Nortel Networks to License and Integrate Novell Directory Services with its Optivity Policy Services Application Suite

PROVO, Utah and SANTA CLARA, Calif. — November 11, 1998 — Bay Networks, a Nortel Networks (NYSE:NT/TSE:NTL) line of business, and Novell®, Inc.(NASDAQ: NOVL), today announced a strategic agreement to develop and market network services that integrate Novell Directory Services® (NDS™) with Bay Networks' Optivity™ Policy Services policy management application suite. The broad-ranging relationship, which delivers on a joint announcement made by the companies in October 1997, will leverage the intelligence of NDS and its user and resource data to manage Bay Networks' enterprise networking products, to improve quality of network service while reducing network ownership costs. Bay Networks will license NDS for bundling and integration with its Optivity Policy Services suite, to be delivered in the second quarter of 1999.

In addition, Nortel Networks and Novell will work together to advance industry standards by collaborating within the Desktop Management Task Force (DMTF) to ensure that product offerings are based on such industry standards such as the Common Information Model (CIM) and its Directory Enabled Network (DEN) specification.

"The next major evolution in network management involves the administration of policies in multivendor networks," said David House, president of Nortel Networks and president of the Bay Networks line of business. "Leveraging the rich datastore and intelligence of NDS advances that management to an unprecedented level, allowing policies to be based on user and resource identity, independent of their location or other physical limitations. This capability is critical to our vision for changing the way the world shares ideas through Unified Networks that span data and telephony."

"The message is clear: NDS is finding a prominent place at the heart of the Internet," said Dr. Eric Schmidt, chairman and CEO of Novell, Inc. "The relationship with Nortel Networks further validates the power of Novell Directory Services to securely manage the opportunities of a networked world."

Optivity is the leading enterprise network management application, with over 70 percent market share (IDC, 1997 Network Element Management report, May 1998), providing Novell with an efficient and broad-reaching mechanism for distributing NDS. In addition, this agreement is further evidence of Nortel Networks' commitment to policy-enabled networking as outlined in its August Optivity Policy Services announcement. Policies can provide the ability to centrally provision, enforce and verify policies throughout a network, enabling the dynamic allocation of resources to users, groups and applications based on the current state of the network and an administratively defined set of rules.

Product Integration

With the integration of NDS and Optivity Policy Services, network administrators will be able to allocate critical network resources based on corporate policy; and end users will see improved, high-quality network performance with consistent, prioritized access to key applications. This integration allows customers to define policies based on user identity or other objects defined in NDS and apply them regardless of the user's location or IP address.

This integration between the physical network and directory-enabled software that controls access to all applications and resources on the network will greatly reduce the costs associated with managing both. This NDS-enabled solution will allow network administrators to centrally maintain user, application and equipment information as well as the relationships among those components for both software and hardware management.

Advancing Standards

The new relationship between Nortel Networks and Novell will allow the companies to collaborate on new standards proposals related to the interoperability of physical networks and directories. Among such standards, the DEN specification is evolving to offer a standard approach to defining schema for integrating network equipment, such as routers and switches, with a directory service. The companies' joint support for IP, LDAP, DEN and RADIUS continually improves customers' ability to easily integrate heterogeneous private networks with the Internet.

Pricing and Availability

NDS will be licensed and bundled with Optivity Policy Services, which will be available in the second quarter of 1999. Pricing for Optivity Policy Services is not yet been released.

About Optivity Network Management

Bay Networks' Optivity product family provides the industry's leading solution for management of network systems, network devices, and network traffic. The applications suite provides visibility to the changing nature of the physical network as well as the dynamic usage patterns and the applications transiting these networks. Optivity links application service management and network-system management together, providing network administrators a completely integrated solution for delivering the quality of service that today's business-critical networks and applications require.

About Novell Directory Services

Novell's directory technology, NDS, is the world's leading directory service. It is the unifying, cross-platform infrastructure for managing, securing, accessing and developing to all the major components of a network. NDS supports more APIs, tools, standards and protocols than any other directory service. The advanced functionality in NDS offers a strong development foundation for delivering secure, manageable network applications. The market-proven and powerful structure of NDS streamlines administrative tasks to minimize management time and expense.

About Nortel

Nortel Networks works with customers worldwide to design, build, and deliver telecommunications and IP-optimized networks. Customers include public and private enterprises and institutions; Internet service providers; local, long-distance, cellular and PCS communications companies, cable television carriers, and utilities.

Nortel Networks' common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock exchanges. Nortel Networks had 1997 revenues of US$15.5 billion and Bay Networks, a wholly owned subsidiary of Nortel Networks, had revenues of US$2.4 billion during its most recent fiscal year. The combined company's workforce totals approximately 80,000 employees worldwide. Press may access Nortel Networks announcements and company information on the World Wide Web at www.nortel.com.

About Novell

Novell, Inc. (NASDAQ:NOVL) is the world's largest network software company and the leader in directory-enabled network solutions. Novell solutions make networks more manageable and secure and reduce the total cost of ownership for organizations of every kind and size. Novell's worldwide channel, developer, education and technical support programs are the most extensive in the network computing industry.

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 www.novell.com. Press may access Novell announcements and company information on the World Wide Web at www.novell.com/pressroom.

Novell, NetWare and Novell Directory Services are registered trademarks and NDS is a trademark of Novell, Inc. All other trademarks are the property of their respective holders.

*Nortel Networks, the Nortel Globemark, and How the World Shares Ideas are trademarks of Northern Telecom, and Bay Networks and Optivity are trademarks are of Bay Networks, Inc.

Press Contacts:
Katrina Larson
Novell, Inc.
Phone: (801) 861-5593
Internet: kalarson@novell.com

Ellen Roeckl
Nortel Networks
Phone: 408-495-3083
Internet: eroeckle@baynetworks.com