In what would be a major blow to Novell Inc’s core ambitions for its Novell Directory Services software, Bay Networks Inc looks set to side with Microsoft Corp’s rival technology, Active Directory. The move follows a similar deal between Microsoft and Cisco Systems Inc (CI No 3,157). Don’t be surprised if you hear a similar announcement in the next few months from Bay said Lloyd Carney executive vp at Bay’s Enterprise Business Group. Carney would not say whether Bay would opt for NDS or Active Directory, but suggested that Microsoft is most likely to be the company it will side with. Bay already has a close relationship with Microsoft and our routing software is included in Steelhead, said Carney. Steelhead is Microsoft’s software project which aims to place router functionality within Windows NT itself. Bay provided Microsoft with its Open Shortest Path First (OSPF) software in a technology exchange. Bay says its technology would benefit from bringing directory services to its network management software portfolio. Although Novell chairman and chief executive officer Eric Schmidt believes NDS has at least a years lead over Microsoft’s directory technology, and says NDS for NT will ship six months before Active Directory, a Microsoft endorsement from two major networking companies would be a big blow to its attempts to establish NDS as a standard.