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July 17, 1991

MICROSTOPT: NOW NOVELL WILL BUY DIGITAL RESEARCH

By CBR Staff Writer

Making clear that it really is open season for kicking Microsoft Corp in the shins, Novell Inc, Provo, Utah has definitive agreement to acquire Digital Research Inc, Monterey, California for 1.5m new Novell shares valued at about $79.5m, enabling Novell to offer customers of its NetWare network operating system a companion MS-DOS-compatible environment for their desktops that will obviate the need for them to buy anything from Microsoft. Motorola Inc and Northern Telecom Ltd are significant shareholders in privately-held Digital Research, and will presumably get small positions in Novell. Novell said that it was responding to customer demand for tightly coupling network operating system software with desktop and host computer operating systems. Novell is already the largest outside investor in Unix System Laboratories, owner of Unix System V.4. The agreement gives Novell the various versions of the MS-DOS-compatible DR-DOS, which is widely regarded by its users as a superior product; Digital Research also offers the multitasking Concurrent DOS, and has its own FlexOS real-time multi-tasking, multi-user operating system for the Intel Corp iAPX-86 chip family. Novell also gets the Monterey development centre that develops the GEM graphical user interface and other graphics technology, and FlexOS, used by Fanuc Ltd, IBM Corp, ICL Plc and Siemens AG. And here in the UK, in Hungerford, Berkshire, Digital Research develops DR DOS, DR Multiuser DOS and Concurrent DOS. DR DOS is claimed to represent between 10% and 15% of the overall MS-DOS and compatible market. Completion is set for October and Digital Research has agreed to pay a fee in the event the merger fails to be completed because of a vote of its shareholders, or a change in recommendation by its board. The originator of CP/M has 273 employees and did $40.9m turnover in its fiscal year to September 30 last. As well as the possibility of adding features to DR DOS before Microsoft implements them in MS-DOS, the acquisition liberates Novell from the irritation that Microsoft refuses to discuss its future product plans with Novell, which needs to know them in order to keep NetWare up to spec.

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