<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-Q
       (Mark One)

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the quarterly period ended March 31, 2001

                                       OR

            [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
            For the transition period from __________ to __________

                         COMMISSION FILE NUMBER 0-21040


                         CAMBRIDGE TECHNOLOGY PARTNERS
                             (MASSACHUSETTS), INC.
             (Exact name of registrant as specified in its charter)



               DELAWARE                          06-1320610
     (State or other jurisdiction of         (I.R.S. Employer
      incorporation or organization)      Identification Number)


           8 CAMBRIDGE CENTER
       Cambridge, Massachusetts                     02142
   (Address of principal executive offices)       (Zip Code)

                                 (617) 374-9800
              (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes   X   No  ___

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:

     As of  April 30, 2001, there were 63,532,772  shares of common stock
outstanding.

<PAGE>

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.

                               TABLE OF CONTENTS
                               -----------------


PART I - FINANCIAL INFORMATION:

ITEM 1:  FINANCIAL STATEMENTS

  Consolidated Balance Sheets as of March 31, 2001 and
    December 31, 2000                                                   3

  Consolidated Statements of Operations for the Three
    Months Ended March 31, 2001 and 2000                                4

  Consolidated Statements of Cash Flows for the Three
    Months Ended March 31, 2001 and 2000                                5

  Notes to Consolidated Financial Statements                            6

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                         12

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    23


PART II - OTHER INFORMATION:

Item 1:  Legal Proceedings                                             24

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS                     24

Item 6:  Exhibits and Reports on Form 8-K                              25

SIGNATURES                                                             26

EXHIBIT INDEX                                                          27


                                       2
<PAGE>

 PART I - FINANCIAL INFORMATION
  Item 1.  Financial Statements
  -------  --------------------

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                          CONSOLIDATED BALANCE SHEETS
                (in thousands, except share and per share data)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                 March 31,   December 31,
                                                                   2001         2000
-------------------------------------------------------------   ----------   ------------
<S>                                                              <C>         <C>
ASSETS
Current assets:
 Cash and cash equivalents                                        $ 47,056       $ 66,723
 Investments                                                        17,257         29,987
 Accounts receivable, less allowance of $14,416 and $17,964
  at March 31, 2001 and December 31, 2000, respectively             85,177         96,537
 Unbilled revenue on contracts                                      13,557          8,813
 Deferred income taxes                                              25,518         14,083
 Prepaid expenses and other current assets                          31,958         31,936
                                                                  --------       --------
  Total current assets                                             220,523        248,079

Property and equipment, net                                         38,978         44,310
Deferred income taxes                                               33,938         33,938
Long-term investments                                                7,098          8,094
Other assets                                                        10,886          8,123
                                                                  --------       --------
  Total assets                                                    $311,423       $342,544
                                                                  ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                                 $ 18,147       $ 13,879
 Accrued expenses                                                   47,499         60,150
 Accrued restructuring costs                                        14,411         11,933
 Deferred revenue                                                    3,731          6,091
 Income taxes payable                                               21,955         24,822
                                                                  --------       --------
  Total current liabilities                                        105,743        116,875

Other long-term liabilities                                          1,250          1,250

Commitments and contingencies (see Note  G)

Stockholders' equity:
 Preferred stock, par value $.01 per share, 2,000,000 shares
  authorized; none issued and outstanding
  at March 31, 2001 and December 31, 2000, respectively                  -              -
 Common stock, $.01 par value, 250,000,000 shares authorized;
  63,532,271 and 63,492,236  shares issued and outstanding
  at March 31, 2001 and December 31, 2000, respectively                635            635
 Additional paid-in capital                                        171,852        171,782
 Retained earnings                                                  45,887         67,123
 Accumulated other comprehensive loss                              (12,510)       (13,458)
 Deferred compensation                                              (1,434)        (1,663)
                                                                  --------       --------
  Total stockholders' equity                                       204,430        224,419
                                                                  --------       --------
  Total liabilities and stockholders' equity                      $311,423       $342,544
                                                                  ========       ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.

                                       3
<PAGE>

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
                                  (unaudited)

                                         Three Months Ended March 31,
                                         ----------------------------
                                               2001       2000
                                             --------   --------

Revenues                                     $116,485   $147,592
Costs and expenses:
 Project costs                                 70,307     89,925
 General and administration                    49,632     59,067
 Sales and marketing                           17,137     19,295
 Restructuring and other costs                 11,000          -
                                             --------   --------
   Total operating expenses                   148,076    168,287
                                             --------   --------

Loss from operations                          (31,591)   (20,695)

Other income (expense):
 Interest income, net                             850        706
 Gain (loss) on investment                     (1,096)     5,113
 Gain on sale of assets                             -      7,661
 Foreign exchange gain (loss)                    (834)        90
                                             --------   --------
   Total other income (expense)                (1,080)    13,570
                                             --------   --------

Loss before income taxes                      (32,671)    (7,125)
Benefit for income taxes                      (11,435)    (2,850)
                                             --------   --------

Net loss                                     $(21,236)  $ (4,275)
                                             ========   ========

Basic net loss per share                        $(.34)     $(.07)
                                             ========   ========

Diluted net loss per share                      $(.34)     $(.07)
                                             ========   ========

Weighted average number of
 common shares outstanding - Basic             63,312     62,270
                                             ========   ========
Weighted average number of
 common and common
 equivalent shares outstanding - Diluted       63,312     62,270
                                             ========   ========

The accompanying notes are an integral part of the consolidated financial
statements.

                                       4
<PAGE>

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                            2001       2000
                                                          --------   --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net  loss                                                $(21,236)  $ (4,275)
Amounts that reconcile net loss to net cash
 used in operating activities:
 Depreciation and amortization                              4,575      4,238
 Stock based compensation                                     229        500
 Non-cash restructuring costs                              11,000          -
 (Gain) loss on investment                                  1,096     (5,113)
 Gain on sale of assets                                         -     (7,661)
 Change in deferred income taxes                          (11,435)    (2,524)
 Changes in assets and liabilities:
   Decrease (increase) in accounts receivable              10,216     (6,248)
   Increase in unbilled revenue on contracts               (5,079)    (3,401)
   Increase in prepaid expenses and other current assets     (510)    (4,911)
   (Increase) decrease in other assets                     (2,959)     1,182
   Increase (decrease) in accounts payable                  4,494     (3,566)
   Decrease in accrued restructuring costs                 (7,085)         -
   (Decrease) increase in accrued expenses                (11,675)     9,536
   (Decrease) increase in deferred revenue                 (2,340)     1,724
   Decrease in income taxes payable                        (3,136)      (314)
   Increase in other long-term liabilities                      -      2,000
                                                          --------   --------
 Net cash used in operating activities                    (33,845)   (18,833)
                                                          --------   --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment                        (2,589)    (2,790)
Proceeds from the disposal of property and equipment        1,206          -
Purchase of investments                                         -     (1,944)
Proceeeds from investments                                 12,730      7,746
Proceeds from sale of assets                                    -      3,001
                                                          --------   --------
     Net cash provided by investing activities             11,347      6,013
                                                          --------   --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and capital leases                  -        (37)
Proceeds from employee stock purchase plan                      -      2,826
Proceeds from exercise of stock options                        70      5,789
                                                          --------   --------
     Net cash provided by financing activities                 70      8,578
                                                          --------   --------

Effect of foreign exchange rate changes on cash             2,761        (96)

Net decrease in cash and cash equivalents                 (19,667)    (4,338)
Cash and cash equivalents at beginning of period           66,723     62,288
                                                          --------   --------
Cash and cash equivalents at end of period               $ 47,056   $ 57,950
                                                          ========   ========

The accompanying notes are an integral part of the consolidated financial
statements.

                                       5
<PAGE>

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

A.  BASIS OF REPORTING
--  ------------------

The accompanying consolidated financial statements of Cambridge Technology
Partners (Massachusetts), Inc., a Delaware corporation ("Cambridge"), include
the accounts of Cambridge and all of its wholly owned subsidiaries.  All
intercompany transactions and balances have been eliminated in consolidation.
Certain prior period amounts have been reclassified to conform to current period
presentation. In the opinion of management, the consolidated financial
statements reflect all normal and recurring adjustments, which are necessary for
a fair presentation of Cambridge's financial position, results of operations,
and cash flows as of the dates and for the periods presented.  The consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information.  Consequently, these
statements do not include all the disclosures normally required by generally
accepted accounting principles for annual financial statements or those normally
made in the Company's Annual Report on Form 10-K.  Accordingly, reference should
be made to the Company's Annual Report on Form 10-K for the year ended December
31, 2000 for additional disclosures, including a summary of the Company's
accounting policies.  The consolidated results of operations for the three
months ended March 31, 2001 are not necessarily indicative of results for the
full year.

B.  ACQUISITION
--  -----------

On March 12, 2001, Novell, Inc. ("Novell) announced it had entered into a
definitive agreement to acquire Cambridge. Under terms of the agreement, Novell
will exchange 0.668 of a share of Novell common stock for every outstanding
share of Cambridge's common stock. The acquisition has been approved by the
board of directors of each company and is subject to customary closing
conditions, including approval by the shareholders of Cambridge. If completed,
Cambridge will become a wholly owned subsidiary of Novell.

C.  RESTRUCTURING AND OTHER COSTS
--  ------------------------------

During the first quarter of 2001, Cambridge approved and implemented a
restructuring program that resulted in a charge of $11.0 million for
restructuring and other costs. This restructuring plan was designed to remove
costs from the organization by eliminating 213 billable and 43 non-billable
employees, and reducing space requirements in both United States and European
field locations. The $11.0 million charge consists of $8.2 million of severance
costs, $1.3 million to close or sublease existing offices, $1.4 million to
write-down leasehold improvements and office equipment, and $0.1 million of
other associated costs. All severance and other costs associated with the
restructuring plan will be paid in 2001. Costs to close offices will be paid in
2001 while costs to sublet offices will be paid according to the lease terms.
All leasehold improvements and office equipment will be written-off in 2001.

During 2000, Cambridge approved and implemented restructuring programs that
resulted in a charge of $27.0 million for restructuring and other costs. In the
fourth quarter of 2000, Cambridge recorded $5.0 million of severance costs as
part of a restructuring plan to balance delivery capacity and infrastructure
with demand by eliminating 240 billable and 40 non-billable positions. Through
March 31, 2001, 250 employees have been eliminated under this plan. In the third
quarter of 2000, Cambridge recorded  $22.0 million of restructuring costs as
part of a plan to eliminate 423 positions and reduce space requirements in both
Corporate headquarters and North America field locations. The $22.0 million
charge consists of $9.2 million of severance costs,  $6.2 million to write-down

                                       6
<PAGE>

leasehold improvements and office equipment, $4.1 million to close or sublease
existing offices and $2.5 million of other associated costs. Through March 31,
2001, 360 employees have been eliminated under this plan. All severance and
other costs associated with the restructuring plan will be paid by September 30,
2001. Costs to close offices will be paid by September 30, 2001 while costs to
sublet offices will be paid according to the lease terms. All leasehold
improvements and office equipment will be written-off in by September 30, 2001.

Restructuring plan activities since December 31, 2000 were as follows (in
thousands, except employee amounts):

<TABLE>
<CAPTION>
                                                                 Employee                        Asset     Other
                                        Total        Total      Termination        Lease        Write-      Exit
                                      Employees      Amount        Costs       Abandonements     downs     Costs
                                     ----------     --------    -----------    -------------    -------    -----
<S>                                   <C>           <C>         <C>            <C>               <C>        <C>
First quarter 2001 provision             256        $11,000       $ 8,185         $1,253        $1,437     $125
Less:
Cash payments and asset
   write-downs                             -              -             -              -             -        -
                                       ------       --------     ---------        -------       -------    -----
Balance of first quarter 2001
   provision at March 31, 2001           256         11,000         8,185             1,253      1,437       125
                                       ------       --------     ---------        ----------    -------    ------

Balance of fourth quarter 2000
  provision at December 31, 2000         280          5,000         5,000                 -          -         -
Less:
Cash payments and asset
   write-downs                          (250)        (4,937)       (4,937)                -          -         -
                                       ------       --------     ---------        ----------    -------    ------
Balance of fourth quarter 2000
  provision at March 31, 2001             30             63            63                 -          -         -
                                       ------       --------     ---------        ----------    -------    ------


Balance of third quarter 2000
   provision at December 31, 2000        125         11,319         3,417             3,029      4,386       487
Less:
Cash payments and asset
   write-downs                           (62)        (3,020)       (1,156)             (967)      (872)      (25)
                                       ------       --------     ---------        ----------    -------    ------
Balance of third quarter 2000
  provision at March 31, 2001             63          8,299         2,261             2,062      3,514       462
                                       ------       --------     ---------        ----------    -------    ------


Total accrued balance at
   March 31, 2001                        349        $19,362       $10,509            $3,315     $4,951      $587
                                       ======       ========     =========        ==========    =======    ======
</TABLE>

The total reserve for asset write-downs of $4.9 million is reported in property
and equipment, net in the consolidated balance sheets. The remaining $14.4
million of accrued restructuring costs is reported on its own line in the
consolidated balance sheets.

                                       7
<PAGE>

D.  NET INCOME PER SHARE
--  --------------------

The following table presents the calculation of earnings per share ("EPS") for
the three months ended March 31, 2001 and 2000 (in thousands except per share
data):

                                                        Three Months Ended
                                                             March 31,
                                                      ----------------------
                                                         2001        2000
                                                     ----------   -----------

Net loss                                              $(21,236)    $(4,275)
                                                     ==========   ===========
Basic:
  Weighted average number of common
  shares outstanding                                    63,312      62,270
                                                     ==========   ===========

     Net loss per share                               $   (.34)    $  (.07)
                                                     ==========   ===========
Diluted:
  Weighted average number of common
  shares outstanding                                    63,312      62,270
   Dilutive effects of stock options                         -           -
                                                     ----------   ----------
   Weighted average number of common and common
      equivalent shares outstanding                     63,312      62,270
                                                     ==========   ==========

        Net loss per share                           $   (.34)     $  (.07)
                                                     ==========   ==========

For the three month periods ended March 31, 2001 and 2000, basic and diluted EPS
were calculated based solely on weighted average number of common shares
outstanding. For the three months ended March 31, 2001 and 2000, 17.0 million
and 15.3 million shares respectively, were excluded from the computation of
diluted EPS because the effects of these shares were anti-dilutive.

E.  ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
--  ------------------------------------------------------------

Effective January 1, 2001, Cambridge adopted Statement of Financial Accounting
Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and
Hedging  Activities," which requires that Cambridge record all derivatives on
its balance sheet at fair value.  Cambridge purchases foreign exchange forward
contracts in an attempt to mitigate the risk of changes in foreign exchange
rates associated with intercompany balances. As of March 31, 2001, Cambridge
held foreign exchange forward contracts of approximately $10.4 million and there
were no related deferred gains or losses.  As of March 31, 2001, Cambridge
maintained foreign exchange contracts to mitigate the risk of changes in British
pounds, Swiss francs, European euros, Swedish kronas, and Australian dollars.
Cambridge does not hold foreign exchange contracts for trading purposes. The
contracts generally have maturities of one month.  The impact of exchange rate
movements on the fair value of the contracts has in the past and continues to be
recorded in other income in the period in which the exchange rates change.   Due
to the fact that the change in fair value of these forward contracts is
naturally offset, to a significant extent, in the income statement by changes in
the fair value of the foreign currency denominated intercompany balances,
Cambridge has elected not to designate these contracts as derivatives in a hedge
relationship as defined by FAS 133.  Accordingly, the adoption of  SFAS 133 had
no impact on the results of operations of Cambridge.

                                       8
<PAGE>

F.  COMPREHENSIVE INCOME
--  --------------------

Comprehensive income presents a measure of all changes in equity that result
from recognized transactions and other economic events during the period other
than transactions with stockholders. The following table presents the
calculation of comprehensive income and its components for the three months
ended March 31, 2001 and 2000 (in thousands):


                                                        Three Months Ended
                                                             March 31,
                                                       --------------------
                                                         2001         2000
                                                       ---------    -------

Comprehensive loss:
    Net loss                                           $(21,236)    $(4,275)
    Other comprehensive income (loss):
      Unrealized loss on marketable equity
       securities, net of taxes of ($5) and
       $(2,525) for the three month periods ended
       March 31, 2001 and 2000, respectively                 (9)     (3,788)
      Foreign currency translation adjustment               957      (1,325)
                                                       ----------   ---------
    Other comprehensive income (loss)                       948      (5,113)
                                                       ----------   ---------
        Comprehensive loss                             $(20,288)    $(9,388)
                                                       ==========   =========

G.   COMMITMENTS AND CONTINGENCIES
--   -----------------------------

In March and April 1999, certain stockholders of Cambridge filed ten separate
class action lawsuits against Cambridge and certain of the Cambridge's officers
in the United States District Court for the District of Massachusetts ("District
Court"). These were consolidated by the District Court. The suits alleged
misrepresentations and omissions regarding Cambridge's future growth prospects
and progress of Cambridge's reorganization in violation of federal securities
laws. On March 30, 2001, the District Court dismissed the case in its entirety,
with prejudice.

Cambridge is involved in litigation and various other legal matters, which have
arisen in the ordinary course of business, some of which relates to the
collection of client receivables.  Cambridge does not believe that the ultimate
resolution of any such existing matter will have a material adverse effect on
its financial condition, results of operations, or cash flows.

On March 12, 2001, Novell announced it had entered into a definitive agreement
to acquire Cambridge. Pursuant to change in control agreements, which Cambridge
entered into with certain executive officers in October 2000, Cambridge may be
required to make severance payments, which could have a material effect on
Cambridge's results of operations in the period in which the covered executives
are terminated. Under the terms of the agreements, certain executive officers
would be entitled to severance benefits if, within 24 months following a change
in control, they were involuntarily terminated without cause or voluntarily
terminated for good reason. Cambridge is not presently able to reasonably
estimate the amounts, if any, which might become payable under the terms of
these agreements.

                                       9
<PAGE>

H.   CAMBRIDGE TECHNOLOGY CAPITAL FUND I L.P. (THE "FUND")
--   ------------------------------------------------------

The Fund was formed in October 1997 as a limited partnership with committed
capital of approximately $25.3 million. The Fund's goal is capital appreciation
and is intended to invest in expansion-stage, private companies providing
products and services within the technology industry. Cambridge's ownership
interest in the Fund, of approximately 24%, is accounted for using the equity
method of accounting. Cambridge's total capital commitment to the Fund is
approximately $6.0 million, of which $5.7 million has been contributed through
March 31, 2001.  The carrying value of Cambridge's investment in the Fund was
approximately $5.1 million and $18.2 million at March 31, 2001 and 2000
respectively, and is included in long-term investments in the consolidated
balance sheet.  For the quarter ended March 31, 2001, Cambridge did not receive
any distributions from the Fund. For the quarter ended March 31, 2000, Cambridge
received approximately $5.9 million of cash distributions and $14.2 million of
distributions in-kind in the form of marketable equity securities. For the first
quarter of 2001, Cambridge recorded a loss of $1.1 million from its equity
investment in the Fund which was primarily due to impairment charges on
portfolio companies yet to go public. The amount of  gain or loss allocated to
Cambridge each period is based on the allocation of the Fund's income as
determined by the Fund's partnership agreement.

Summarized financial information of the Fund is presented as follows (in
thousands):

                                                     Three Months Ended
                                                 ---------------------------
                                                          March 31,
                                                     2001             2000
                                                 ------------     ----------

Net realized gains                                $       -        $ 69,967
Net decrease in unrealized
     appreciation of investments                     (3,601)        (51,989)
Net loss from operations                               (166)           (156)
                                                  -----------     -----------

Net increase (decrease) in partners'
 capital                                            $(3,767)       $ 17,822
                                                  ===========     ===========

The net decrease in unrealized appreciation of investments for the three months
ended March 31, 2001 and 2000 included zero and $50.0 million respectively, of
reversals of unrealized gains from prior periods in order to record realized
gains for securities sold or distributed during the current period.

I.   OPERATING SEGMENT INFORMATION
--   -----------------------------
 .
The chief operating decision maker of Cambridge receives reports on three
operating segments: North America, International and Change Management
Consulting ("CMC"). The North American operating segment consists of e-business,
systems integration, and IT consulting services in the United States and Canada,
while the International operating segment consists of e-business, systems
integration, and IT consulting services outside of North America. CMC consists
of operations management consulting in the United States, Canada, and Europe.

Cambridge evaluates each segment's performance based on revenues and income from
operations. Total corporate revenues, loss from operations and total assets have
been included in North America. The carrying value of the investment in the Fund
of $5.1 million

                                      10
<PAGE>

and $18.2 million is included in total assets for North America at March 31,
2001 and 2000, respectively. Prior period amounts have been reclassified to
conform with current period presentation.

Information about the Company's operating segments is presented as follows (in
thousands):

                                                       Three Months Ended
                                                             March 31,
                                                   --------------------------
                                                      2001            2000
                                                   ----------      ----------

Revenues:
   North America                                    $ 56,886        $ 80,542
   International                                      35,228          35,256
   Change Management Consulting                       24,371          31,794
                                                   ----------      ----------
     Consolidated                                   $116,485        $147,592
                                                   ==========      ==========

Loss from operations:
   North America                                    $(19,765)       $(23,885)
   International                                      (6,526)           (758)
   Change Management Consulting                       (5,300)          3,948
                                                   -----------      ---------

     Consolidated loss from operations               (31,591)        (20,695)
   Other income (expense)                             (1,080)         13,570
                                                   -----------      ---------
Consolidated loss before incomes taxes              $(32,671)       $ (7,125)
                                                   ===========      =========

Total assets:
   North America                                    $230,517        $268,586
   International                                      48,259          56,857
   Change Management Consulting                       32,647          50,735
                                                   ----------       ---------
     Consolidated                                   $311,423        $376,178
                                                   ==========       =========

                                      11
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------   ---------------------------------------------------------------
                RESULTS OF OPERATIONS
                ---------------------

Overview

On March 12, 2001, Novell, Inc. ("Novell") announced it had entered into a
definitive agreement to acquire Cambridge Technology Partners (Massachusetts),
Inc. ("Cambridge"). Under terms of the agreement, Novell will exchange 0.668 of
a share of Novell common stock for every outstanding share of Cambridge's common
stock. The acquisition has been approved by the board of directors of each
company and is subject to customary closing conditions, including approval by
the shareholders of Cambridge. If completed, Cambridge will become a wholly
owned subsidiary of Novell.

Cambridge performs technology and consulting services to help its clients
develop and accelerate their transition to Internet-based e-business solutions
and processes--the information technology that defines the "New Economy."
Founded in 1991, Cambridge provides strategic and management consulting as well
as systems integration services to transform its clients into e-Businesses.
Working in collaboration with large corporations and high-velocity middle market
companies, Cambridge combines a deep understanding of New Economy issues with
integrated, end-to-end services, and a proven track record of shared risk and
rapid delivery.

Electronic commerce business solutions delivered to clients have become and will
likely continue to become more integrated with clients' value chains and legacy
systems. Cambridge's service offering generally include Digital Business
Strategy, eCommerce, eCustomer Relationship Management, eSupply Chain
Management, eEnterprise Resource Management, User Experience Design, and
Technology. In addition, the Cambridge service offering includes Change
Management Consulting ("CMC"), an operations management leader specializing in
the design of operational strategy and, equally important, the execution of that
strategy.

Cambridge provides a significant portion of its services on a fixed-time, fixed-
price model, with client involvement at all stages of the process. Cambridge and
its clients generally agree on a contractually fixed price for each phase of a
project. In performing its services, Cambridge brings together key client users,
executives, and IT professionals in interactive sessions to achieve consensus on
the business case, strategic objectives, and functionality of a business
solution. In many cases, Cambridge employs a rapid deployment methodology that
features an iterative approach. Cambridge believes that these techniques permit
the delivery of results in rapid time frames--typically within three to twelve
months.

Cambridge continues to be adversely impacted by a slowing economy, particularly
in the United States. During 2001, Cambridge recorded $11.0 million of
restructuring and other costs in a restructuring plan designed to continue to
remove costs from the business by balancing current delivery capacity and
infrastructure with demand. As a result, 213 billable and 43 non-billable
positions will be eliminated, and office space requirements will be reduced in
field locations.

Voluntary employee turnover, on an annualized basis, was approximately 26% for
the first quarter of 2001 compared to approximately 23% for the fourth quarter
of 2000. Cambridge's headcount was approximately 3,500 at March 31, 2001
compared to approximately 3,800 at December 31, 2000. Cambridge continues to
assess the skill sets necessary to address the changing market dynamics and
focuses on training, hiring, and assimilating appropriate personnel to service
its clients.

On July 27, 2000, Cambridge announced that it is exploring strategic options to
allow CMC, its operations management consulting unit, to operate as a more
independent but majority-owned business of Cambridge. Options being considered
include investment by a strategic partner or listing on a European stock
exchange. The changes Cambridge is considering are designed to enable CMC to
grow faster and to recruit and retain the best personnel with share option and
incentive programs directly aligned with the unit's performance. Cambridge has

                                      12

<PAGE>

completed much of the work required to restructure CMC in order to facilitate
the options under consideration. Due to the slowdown of the global economy
Cambridge does not expect to carry out one of these options until the second
half of 2001. The closing of any of these options may be delayed and may be
contingent upon the condition of the global economy and CMC's industry.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO
     THREE MONTHS ENDED MARCH 31, 2000

Revenues decreased 21% to $116.5 million in 2001 compared to $147.6 million in
2000. The decrease in revenues in 2001 compared to 1999 was primarily due to a
29% decrease in revenues from its North America operating unit to $56.9 million
from $80.5 million and a 23% decrease in revenues from its CMC unit to $24.4
million from $31.8 million. Revenues from Cambridge's International operating
unit were essentially unchanged at $35.2 million for the quarter ended March 31,
2001 compared to $35.3 million for the quarter ended March 31, 2000. The
decrease in North America operating unit revenues, which consists of e-business,
systems integration, and IT consulting services in the United States and Canada,
was primarily due to the ongoing weakness in the North American economy which
has caused clients to reduce spending, resulting in a slower sales cycle,
contract cancellations or the deferral of additional phases of e-business
initiatives. The decrease in CMC revenues, which consists of operations
management consulting in the United States, Canada and Europe, was primarily due
to weakness in the North American and Western Europe economies that resulted in
reduced spending on such projects.

Geographically, North American revenues decreased 29% to $64.9 million, or 56%
of revenue, in 2001 from $91.2 million, or 62% of revenues, in 2000. Revenues
from International operations decreased by 9% to $51.6 million, or 44% of
revenues, in 2001 from $56.4 million, or 38% of revenues, in 2000. The decrease
in North American revenues is primarily due to the ongoing weakness in the North
American economy which has slowed demand for Cambridge's services. The decrease
in International revenues was primarily due to unfavorable foreign exchange
rates.

Project costs consist principally of salaries and benefits for personnel
dedicated to client projects and other non-reimbursable project costs. Project
costs were $70.3 million, or 60% of revenues in 2001, compared to $89.9 million,
or 61% of revenues, in 2000. The dollar and percentage decrease was due
primarily to an $18.6 million decrease in payroll and payroll related costs. The
decrease in payroll and payroll related costs was primarily due to the 16%
decrease in worldwide project personnel headcount to 2,664 employees at March
31, 2001, from 3,174 employees at March 31, 2000, and the impact of accruing
lower bonuses in 2001 due to the financial performance of Cambridge.

General and administration expenses include salaries and benefits associated
with management and support personnel including, all corporate functions,
facilities costs, training, non-project travel, professional fees, and
recruiting costs. General and administration expenses were $49.6 million, or 43%
of revenues in 2001, compared to $59.1 million, or 40% of revenues in 2000. The

                                      13
<PAGE>

dollar decrease was primarily due to a $4.0 million decrease in non-project
travel costs caused by lower project personnel headcount and enhanced spending
controls. The dollar decrease is also due to a $3.2 million reduction in
facilities and telecommunication costs and a $2.0 million reduction in payroll
and recruiting costs. The percentage increase is primarily due to the decrease
in revenues. General and administration headcount increased 3% to 542 employees
at March 31, 2001, from 525 employees at March 31, 2000.

Sales and marketing expenses include salaries and benefits associated with sales
and marketing personnel, as well as commissions, travel and entertainment costs,
advertising and branding costs. Sales and marketing expenses were $17.1 million,
or 15% of revenues in 2001, compared to $19.3 million, or 13% of revenues in
2000. The dollar decrease resulted primarily from lower advertising costs. Sales
and marketing headcount increased 2% to 247 employees at March 31, 2001, from
243 employees at March 31, 2000.

During the first quarter of 2001, Cambridge recorded $11.0 million of
restructuring and other costs in conjunction with a restructuring plan designed
to remove costs from the organization by eliminating 213 billable and 43 non-
billable employees, and reducing space requirements in both United States and
European field locations. The $11.0 million charge consists of $8.2 million of
severance costs, $1.3 million to close or sublease existing offices, $1.4
million to write-down leasehold improvements and office equipment, and $0.1
million of other associated costs. All severance and other costs associated with
the restructuring plan will be paid in 2001. Costs to close offices will be paid
in 2001 while costs to sublet offices will be paid according to the lease terms.
All leasehold improvements and office equipment will be written-off in 2001. The
2001 restructuring plan is expected to result in total annual cash and cost
savings of approximately $28.5 million, consisting of $20.8 million of project
costs, $4.8 million of general and administrative costs, and $2.9 million of
sales and marketing costs.

During the year ended December 31, 2000, Cambridge recorded $27.0 million of
restructuring and other costs. In the fourth quarter of 2000, Cambridge recorded
$5.0 million of severance costs as part of a restructuring plan to balance
delivery capacity and infrastructure with demand by eliminating 280 positions.
In the third quarter of 2000, Cambridge recorded  $22.0 million of restructuring
costs as part of a plan to eliminate 423 positions and reduce space requirements
in both Corporate headquarters and North America field locations. The $22.0
million charge consists of $9.2 million of severance costs,  $6.2 million to
write-down leasehold improvements and office equipment, $4.1 million to close or
sublease existing offices and $2.5 million of other associated costs. All
severance and other costs associated with the restructuring plan will be paid by
September 30, 2001. Costs to close offices will be paid by September 30, 2001
while costs to sublet offices will be paid according to lease terms. All
leasehold improvements and office equipment will be written-off by September 30,
2001. The 2000 restructuring plan is expected to result in total annual cash and
cost savings of approximately $80.0 million, consisting of $60.0 million of
project costs, $17.0 million of general and administrative costs, and $3.0
million of sales and marketing costs.

                                      14
<PAGE>

Restructuring plan activities since December 31, 2000 were as follows (in
thousands, except employee amounts):

<TABLE>
<CAPTION>
                                                                 Employee                        Asset     Other
                                        Total        Total      Termination        Lease         Write-      Exit
                                      Employees      Amount        Costs       Abandonements      downs     Costs
                                      ---------     -------     -----------    -------------    -------   --------
<S>                                     <C>         <C>          <C>            <C>              <C>        <C>
First quarter 2001 provision             256        $11,000       $ 8,185         $1,253        $1,437      $125
Less:
Cash payments and asset
   write-downs                             -             -             -               -             -         -
                                      --------      -------       --------       --------       -------     -----
Balance of first quarter 2001
   provision at March 31, 2001           256         11,000         8,185          1,253         1,437       125
                                      --------      --------      --------       --------       -------     -----

Balance of fourth quarter 2000
  provision at December 31, 2000         280          5,000         5,000              -             -         -
Less:
Cash payments and asset
   write-downs                          (250)        (4,937)       (4,937)             -             -         -
                                      -------      ---------      --------       --------       -------     -----
Balance of fourth quarter 2000
  provision at March 31, 2001             30             63            63              -             -         -
                                      -------      ---------      --------       --------       -------     -----


Balance of third quarter 2000
   provision at December 31, 2000        125         11,319         3,417          3,029         4,386       487
Less:
Cash payments and asset
   write-downs                           (62)        (3,020)       (1,156)          (967)         (872)      (25)
                                      -------      ---------      --------       --------       -------     -----
Balance of third 2000
  provision at March 31, 2001             63          8,299         2,261             2,062      3,514       462
                                      -------      ---------      --------       -----------    -------     -----
 Total accrued balance at
   March 31, 2001                        349        $19,362       $10,509            $3,315     $4,951      $587
                                      =======      =========      ========       ===========    =======    ======
</TABLE>

Included in other expense for the first quarter of 2001 is a $1.1 million loss
on Cambridge's equity investment in the Cambridge Technology Capital Fund I L.P.
(the "Fund") compared to a gain of $5.1 million for the same period in 2000. The
$1.1 million loss in 2001 is primarily due to impairment charges on portfolio
companies yet to go public, while the $5.1 million gain in 2000 is primarily due
the increase in market value of public portfolio companies. During 2000,
Cambridge also recorded a $7.7 million gain from the sale of its Cambridge
Information Network ("CIN") business

Cambridge maintains monthly foreign exchange forward contracts in an attempt to
hedge against the risk of changes in foreign exchange rates associated with
intercompany balances.  This risk coverage is dependent upon forecasted
intercompany activities at the beginning of each month.  The exchange rate gains
and losses are directly related to the accuracy of such forecasted amounts.  As
of March 31, 2001, Cambridge held foreign exchange contracts of approximately
$10.4 million. The Company continues to monitor the impact of foreign currency
exchange rates on revenues.

Cambridge's effective income tax rate was 35.0% in 2001 compared to 40.0% in
2000. Cambridge reduced its tax rate from period to period as it does not expect
to realize the full benefit of it net operating loss carryforwards. Cambridge's

                                      15
<PAGE>

effective tax rate may vary from period to period based on Cambridge's
profitability, future expansion into areas with varying country, state, and
local statutory income tax rates as well as the impact of any valuation
allowances recorded against its deferred tax assets.

Net loss for the first quarter of 2001 was $21.2 million or $0.34 per share
(basic and diluted) compared to a net loss of $4.3 million or $.07 per share
(basic and diluted) for the same period in 2000.  The net loss for 2001 includes
$7.2 million, after taxes, of restructuring and other costs or $0.11 per share
(basic and diluted).

LIQUIDITY AND CAPITAL RESOURCES
--------------------------------

Cambridge continued to operate debt-free in 2001 and working capital was $114.8
million at March 31, 2001, compared to $131.2 million at December 31, 2000. The
decrease was primarily due to a decrease in cash and cash equivalents,
investments and accounts receivable, partially offset by an increase in deferred
income taxes and a decrease in accrued expenses. Cambridge's days sales
outstanding was 66 days at March 31, 2001 compared to 70 days at December 31,
2000. This decrease in days sales outstanding was primarily due to a decrease in
accounts receivable from 2000 to 2001 related to enhancements to Cambridge's
credit and collection process and a decrease in revenue. Cambridge actively
assesses and monitors the collectability of its accounts receivable.

Net cash used in operating activities was $33.8 million for the first quarter of
2001 compared to $18.8 million for the same period in 2000. Net cash used in
operating activities of $33.8 million for the first quarter of 2001 was
primarily due to a net loss of $21.2 million, a $11.4 million increase in
deferred income taxes and $11.7 million decrease in accrued expenses partially
offset by a $10.2 decrease in accounts receivable. Net cash used in operating
activities of $18.8 million for the first quarter of 2000 was primarily due to a
net loss of $4.3 million, adjusted for non-operating gains from investments and
the sale of assets of $12.8 million and was partially offset by a $9.5 million
increase in accrued expenses.

Cash provided by investing activities increased to $11.3 million for the first
quarter of 2001 from $6.0 million for the same period in 2000. The increase was
primarily due to the maturity of investments held to maturity that were not
reinvested.

Cash provided by financing activities the first quarter of 2001 decreased to
essentially zero from $8.6 million for the same period in 2000. The decrease was
caused by the termination of the employee stock purchase plan in the second half
of 2000 and a decrease in the market value of Cambridge's common stock price
which significantly reduced the exercise of options to purchase common stock.

Capital expenditures of $2.6 million in 2001 were used principally for leasehold
improvements in order to prepare offices to be subleased in conjunction with
Cambridge's restructuring plans. Capital expenditures for 2001 are expected to
approximate $10.0 million, principally for leasehold improvements, personal
computers, telecommunication other equipment to support both current and
anticipated levels of customer activities worldwide. The actual amount of
capital expenditures may vary from management's estimates as capital needs arise
and actual expenditures are made.

Cambridge evaluates, on an ongoing basis, potential acquisitions of companies or
technologies that may complement or enhance Cambridge's global growth
initiatives. Cambridge cannot be certain that it will be able to identify
suitable acquisition opportunities at an acceptable cost, if at all. Liquidity
may also be affected by acquisitions of companies or technology.

                                      16
<PAGE>

The Fund was formed in October 1997 as a limited partnership with committed
capital of approximately $25.3 million. The Fund's goal is capital appreciation
and is intended to invest in expansion-stage, private companies. A wholly-owned
subsidiary of Cambridge acts as the general partner of the Fund's general
partner and Cambridge's investment is accounted for using the equity method of
accounting. Cambridge's capital commitment to the Fund is approximately $6.0
million. At March 31, 2001, Cambridge's cumulative capital contribution to the
Fund amounted to $5.7 million. Cambridge's investment in the Fund resulted in a
net loss of approximately $1.1 million for the quarter ended March 31, 2001.

Cambridge has recorded a deferred tax asset of $59.5 million reflecting the
reflecting the benefit of $28.3 million in net operating loss carryforwards,
which expire in varying amounts between 2004 and 2020. Realization is dependent
on generating sufficient taxable income prior to expiration of the loss
carryforwards. Although realization is not assured, management believes it is
more likely than not that most of the deferred tax asset will be realized. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced. During 2000, Cambridge recorded a valuation
allowance of $4.9 million related to state net operating loss carryforwards that
generally have a shorter life than the federal net operating loss carryforwards
20 years.

Cambridge expects that cash flows from operations will provide the principal
source of future liquidity for Cambridge. However, Cambridge's strategy to
reduce cost in order to match Cambridge's capacity and infrastructure with
demand may not achieve the costs savings anticipated. Cambridge anticipates that
existing cash and investment balances combined with cash generated from
operations will be sufficient to meet Cambridge's working capital requirements
for at least the next twelve months. Operating results and liquidity may be
adversely affected if market demand and revenues do not meet management's
expectations. A number of factors, including market acceptance of Cambridge's
services, significant fluctuations in currency exchange rates, and changes in
general economic, political, or regulatory conditions could adversely affect
future results and liquidity.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements
(statements that are not historical fact) including, without limitation,
statements regarding Cambridge's future net revenues and profits; Cambridge's
planned transition to e-Business; Cambridge's reliance on key personnel to guide
these efforts and its ability to attract and retain qualified employees; capital
expenditures; liquidity sources and needs; working capital needs; effectiveness
of Cambridge's cost cutting initiatives; e-Business initiatives undertaken in
response to customer demand and anticipated market growth opportunities;
Cambridge's announced strategy for CMC and CMC's future financial performance;
increases in personnel and wages for our personnel; the impact of varying
compensation arrangements; and litigation.

These forward-looking statements are not guarantees and are subject to several
risks and uncertainties. While it is impossible to identify each factor and
event that could affect our results, there are a number of important factors
that could cause our actual results to differ materially from those indicated by
the forward-looking statements and that could have an impact on our operating
results, including, without limitation, the risks described in "Factors that May
Affect Future Results" and elsewhere in this Quarterly Report on Form 10-Q, as
well as the risk factors relating to Cambridge and the proposed transaction with
Novell set forth in the Registration Statement on Form S-4 of Novell, as filed
with the Securities and Exchange Commission on April 20, 2001 (the "Proxy
Statement-Prospectus"). We do not assume any obligation to update any of the
forward-looking statements we make.

                                      17
<PAGE>

FACTORS THAT MAY AFFECT FUTURE RESULTS

We caution you that the following important factors, among others, could cause
our actual results to differ materially from those expressed in forward-looking
statements made by or on behalf of Cambridge in this Quarterly Report on Form
10-Q or other filings with the Securities and Exchange Commission, press
releases, communications with investors, and oral statements.

IF THE MERGER WITH NOVELL IS NOT COMPLETED, OUR FUTURE BUSINESS AND OPERATIONS
COULD BE HARMED

If the merger is not completed, we may be subject to the following material
risks:

   .  we maybe required to pay Novell a termination fee of $7.3 million, plus
      any expenses incurred in collecting such fee;

   .  the price of our common stock may decline to the extent that the current
      market price of our common stock reflects a market assumption that the
      merger will be completed; and

   .  we will incur significant costs related to the merger, such as legal,
      accounting and some of the fees and expenses of our financial advisors,
      which costs must be paid even if the merger is not completed.

Further, if the merger is terminated and Cambridge's board of directors
determines to pursue another merger or business combination, it is not certain
that we will be able to find a partner willing to pay an equivalent or more
attractive price than that which would be paid in the merger. In addition, while
the merger agreement is in effect and subject to limited exceptions described in
the Proxy Statement-Prospectus, Cambridge and its officers, board of directors
and advisors are generally prohibited from soliciting, initiating or knowingly
encouraging or entering into extraordinary transactions, such as merger, sale of
assets or other business combination, with any party other than Novell.

WE HAVE A RECENT HISTORY OF OPERATING LOSSES INFLUENCED IN PART BY GENERAL
ECONOMIC CONDITIONS, AND MAY NOT BE ABLE TO REVERSE THIS TREND IN THE NEAR
FUTURE

Primarily as a result of a slowdown in growth in demand for our services, a
slowing global economy and increased cost of recruiting and retaining project
personnel, we have incurred losses. As a result, we will need to generate
additional revenues to achieve profitability. Cambridge's revenues and results
of operations will be influenced by general economic conditions in the United
States and internationally. In the event of a general economic downturn, or an
industry-wide downturn, Cambridge's clients and potential clients may
substantially reduce their information technology and related budgets.
Additionally, potential clients may decide to implement the information
technology projects they do embark upon using international resources,
potentially further affecting the strength of our industry. In the event of an
economic downturn, Cambridge may not be able to achieve or sustain
profitability.

                                      18
<PAGE>

OUR BUSINESS MAY SUFFER IF GROWTH IN THE USE OF THE INTERNET DECLINES

Our business is dependent upon continued growth in the use of the Internet by
our clients, prospective clients and their customers and suppliers. If the
number of users on the Internet does not increase and commerce over the Internet
does not become more accepted and widespread, demand for our services may
decrease and, as a result, our revenues would decline. Factors that may affect
Internet usage or electronic commerce adoption include:

  .   actual or perceived lack of security of information;

  .   lack of access and ease of use;

  .   inconsistent quality of service;

  .   increases in access costs to the Internet;

  .   actual or threatened computer "viruses" or other malicious code;

  .   excessive governmental regulation or the imposition of taxation on
      Internet transactions;

  .   uncertainty regarding intellectual property ownership;

  .   reluctance to adopt new business methods; and

  .   costs associated with the obsolescence of existing infrastructure.


TO SUCCEED IN OUR LABOR INTENSIVE BUSINESS, WE MUST RECRUIT AND RETAIN QUALIFIED
PROFESSIONALS, WHO ARE CURRENTLY IN HIGH DEMAND

We believe that our success depends in part on our ability to attract and retain
highly skilled technical, consulting, managerial, sales and marketing personnel.
The labor-intensive Internet professional services industry currently faces a
shortage of qualified personnel, which is expected to continue. Not only do we
compete with other companies to recruit and hire from this limited pool, our
industry has traditionally experienced high turnover rates. If we cannot hire
and retain qualified personnel or if a significant number of our current
employees leave, we may be unable to complete or retain existing projects or bid
for new projects of similar scope and revenue. The inability to hire and retain
qualified employees could cause our business results to suffer.


OUR QUARTERLY REVENUES AND OPERATING RESULTS COULD FLUCTUATE, WHICH MAY CAUSE
THE MARKET PRICE OF OUR COMMON STOCK TO DECLINE

Our quarterly revenues and operating results are volatile and difficult to
predict. Our quarterly operating results have varied in the past and could vary
significantly from quarter to quarter in the future. Additionally, if our

                                      19
<PAGE>

operating results in some future period are below the expectations of public
market analysts or investors, the market price of our common stock may decline
significantly. Factors that may cause our results and stock price to fluctuate
include:

  .  the number and significance of client engagements commenced and completed
     during a period;

  .  changes in demand for our consulting and implementation services and third
     party products or solutions for which we perform integration services;

  .  our ability to obtain new and follow-on client engagements;

  .  the number of working days in a period;

  .  our ability to collect accounts receivable from some of our clients who
     may not pay us, may pay us only a portion of what we are owed, or may
     delay paying us for an extended period;

  .  the introduction of new services or business models by us or our
     competitors;

  .  changes in market conditions that could impact the value of securities
     owned by us or the value of our investment in Cambridge Technology Capital
     Fund I;

  .  unanticipated negative outcomes of litigation involving us;

  .  our ability to attract, train and retain skilled personnel in all areas of
     our business; and

  .  our ability in a consistent and accurate manner to manage costs, including
     personnel costs and support services costs.

Also, the timing of revenues is difficult to forecast because our sales cycle is
relatively long in the case of new clients and may depend on factors such as the
size and scope of client assignments and general economic conditions. We
generally recognize revenues as we provide services.


AN INABILITY TO MAINTAIN A HIGH LEVEL OF UTILIZATION OF OUR BILLABLE CONSULTANTS
MAY ADVERSELY AFFECT OUR OPERATING RESULTS

Our clients can cancel or reduce the scope of their engagements with us on short
notice. If they do so, we may be unable to reassign our professionals to new
engagements without delay. Personnel and related costs constitute a substantial
portion of our operating expenses. Because these expenses are relatively fixed,
and because we establish the levels of these expenses well in advance of any
particular quarter, underutilization of our professional services employees
could occur, causing significant reductions in our operating results for a
particular quarter.


A PORTION OF OUR REVENUES IS DERIVED FROM DOT-COM COMPANIES, MANY OF WHICH HAVE
LIMITED OPERATING HISTORIES AND SIGNIFICANT NET LOSSES

                                      20
<PAGE>

We derive a portion of our revenues from services performed for dot-com
companies. Many dot-com companies are recently organized, have limited operating
histories, have significant net losses and have limited corporate sponsorship or
financial resources. The volatility of the stock market in recent months has
made it difficult for many dot-com companies to raise funds, and a number of
companies have gone bankrupt. As a result, we may experience greater than
expected customer loss or an inability to collect fees from our customers in a
timely manner if at all. Our ability to achieve revenue and earnings targets or
maintain an adequate cash position could be adversely affected.


OUR BUSINESS MAY BE NEGATIVELY IMPACTED IF WE FAIL TO ACCURATELY ESTIMATE THE
TIME AND RESOURCES NECESSARY FOR THE PERFORMANCE OF OUR SERVICES

We derive a significant portion of our revenues from fixed-price, fixed-time
contracts. Because of the complex nature of the services we provide, it is
sometimes difficult to accurately estimate the cost, scope and duration of
particular client engagements. If we fail to accurately estimate the resources
required for a project or fail to satisfy our contractual obligations in a
manner consistent with the project plan, then our costs to complete the project
could increase substantially. We have occasionally had to commit unanticipated
additional resources to complete projects, and we may have to take similar
action in the future. We may not be compensated for these additional costs or
the commitment of these additional resources, which would negatively impact our
operating results.


OUR FAILURE TO MEET CLIENT EXPECTATIONS OR DELIVER ERROR-FREE SERVICES COULD
RESULT IN LOSSES AND NEGATIVE PUBLICITY

Many of our engagements involve information technology solutions that are
critical to our clients' businesses. Any defects or errors in these solutions or
failure to meet clients' specifications or expectations could result in:

  .  delayed or lost revenues due to adverse client reaction;

  .  requirements to provide additional services to a client at no charge;

  .  negative publicity about us and our services, which could adversely affect
     our ability to attract or retain clients; and

  .  claims for substantial damages against us, regardless of our responsibility
     for such failure, which may not be covered by our insurance policies and
     which may not be limited by the contractual terms of our engagement.


THE INTERNET PROFESSIONAL SERVICES MARKET IS HIGHLY COMPETITIVE AND HAS LOW
BARRIERS TO ENTRY. IF WE CANNOT EFFECTIVELY COMPETE, OUR REVENUES MAY DECLINE

The Internet professional services market is relatively new and highly
competitive. Our competitors include a wide variety of Internet-focused
professional service firms, management consulting companies, traditional
information technology service firms, systems integration firms and internal IT

                                      21
<PAGE>

departments of our prospective clients. Additionally, there are relatively low
barriers to entry into the Internet professional services market. Current or
future competitors may develop or offer services that are comparable or superior
to ours at a lower price, which could significantly decrease our revenues.

WE MAY UNDERTAKE ADDITIONAL ACQUISITIONS WHICH MAY AFFECT OUR ABILITY TO MANAGE
AND MAINTAIN OUR BUSINESS AND MAY BE DIFFICULT TO INTEGRATE INTO OUR BUSINESS

Since our inception, we have acquired a number of businesses. In the future, we
may undertake additional acquisitions of professional service firms that provide
Internet consulting or Internet software application design and implementation
services or other businesses that complement our existing operations. Such
acquisitions could involve a number of risks, including:

  .  the diversion of the attention of management and other key personnel;

  .  inability to effectively integrate the acquired business into our culture,
     client delivery methodology and other standards, controls, procedures and
     policies;

  .  inability to retain the management, key personnel and other employees of
     the acquired business;

  .  inability to retain the acquired customers;

  .  client satisfaction problems with the acquired business that could affect
     our reputation; and

  .  the amortization of goodwill, which may adversely affect our reported
     results of operations.

In addition, any acquired business could significantly underperform relative to
our expectations.


WE FACE INCREASED RISKS IN CONDUCTING BUSINESS ABROAD WHICH MAY DAMAGE OUR
BUSINESS RESULTS

We are a multi-national corporation with offices and subsidiaries around the
world. We face certain risks in doing business abroad that we do not face
domestically. Among the international risks we believe are most likely to affect
us are:

  .  costs and difficulties in staffing and managing international operations;

  .  unexpected changes in and complexity of regulatory requirements;

  .  increased tariffs and other trade barriers;

  .  difficulties in enforcing contractual and intellectual property rights;

  .  longer payment cycles;

                                      22
<PAGE>

  .  local political and economic conditions;

  .  potentially adverse tax consequences, including restrictions on
     repatriating earnings and the threat of "double taxation;" and

  .  currency issues, including fluctuations in current exchange rates and the
     adoption of the Euro by many countries of the European Union.


WE MAY NOT BE ABLE TO PROTECT OUR CONTRACTUAL RIGHTS, WHICH MAY ADVERSELY AFFECT
OUR BUSINESS

We generally enter into contractual relationships with our employees that
protect our confidential information, and impose non-solicitation obligations on
those employees. In the event that our trade secrets or other proprietary
information are misappropriated, our business could be seriously harmed. In
addition, we may not be able to detect unauthorized use of our intellectual
property and take appropriate steps to enforce our rights. In the event we are
unable to enforce these contractual obligations, our business could be adversely
affected.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------- -----------------------------------------------------------

Cambridge maintains investment portfolio holdings of various issuers, types and
maturities. Cambridge's cash and equivalents include cash equivalents that
Cambridge considers to be investments purchased with original maturities of
three months or less. In addition, Cambridge holds investments in governmental
securities with original maturities of one year or less that are stated at
amortized cost, which approximates fair value, and are classified as investments
held to maturity. Given the short-term nature and investment grade quality of
these investments at March 31, 2001, a sharp rise in interest rates should not
have a material adverse impact on the fair value of these securities. As a
result, Cambridge does not currently hedge these interest rate exposures.

Cambridge faces exposure to financial market risks, including adverse movements
in foreign currency exchange rates. These exposures may change over time as
business practices evolve and could have a material adverse impact on
Cambridge's financial results. Cambridge's primary exposure has been related to
local currency revenue and operating expenses in Europe, Japan, and Latin
America. Historically, Cambridge has utilized foreign exchange forward contracts
to hedge currency exposures associated with certain intercompany payables
denominated in local currencies. At March 31, 2001, Cambridge held foreign
exchange contracts with a contract value of $10.4 million that have maturities
of one month. The goal of Cambridge's hedging activity is to offset the impact
of currency fluctuations on certain local currency intercompany payables. The
success of this activity depends upon forecasts of transaction activity
denominated in various currencies. To the extent that these forecasts are
overstated or understated during periods of currency volatility, Cambridge could
experience unanticipated currency gains or losses. Due to the short-term
maturities of its foreign exchange forward contracts, Cambridge does not expect
foreign currency exchange rate fluctuations to have a material impact on its
operating results.

                                      23
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
-------   -----------------

In March and April 1999, certain stockholders of Cambridge filed ten separate
class action lawsuits against Cambridge and certain of Cambridge's officers in
the United States District Court for the District of Massachusetts ("District
Court"). These were consolidated by the District Court. The suits alleged
misrepresentations and omissions regarding Cambridge's future growth prospects
and progress of Cambridge's reorganization in violation of federal securities
laws. On March 30, 2001, the District Court dismissed the case in its entirety,
with prejudice.

Cambridge is involved in litigation and various other legal matters, which have
arisen in the ordinary course of business, some of which relates to the
collection of client receivables.  Cambridge does not believe that the ultimate
resolution of any such existing matter will have a material adverse effect on
its financial condition, results of operations, or cash flows.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS
-------   -----------------------------------------

On June 23, 1997, the Board of Directors of Cambridge approved and adopted a
Rights Plan pursuant to a Rights Agreement which was amended on September 30,
1998, and in connection therewith, declared a dividend of one preferred stock
purchase right for each outstanding share of Cambridge's common stock, which
dividend was paid on July 3, 1997 to holders of record of Cambridge at the close
of business on July 3, 1997. One preferred stock purchase right is also attached
to each share of Cambridge's common stock issued after July 3, 1997. The rights
are not presently transferable separate from the share of common stock with
respect to which they were issued. The rights are subject to adjustment and
become exercisable upon the occurrence of certain events described in the Rights
Agreement. In general, Cambridge is entitled to redeem the rights at $.01 per
right. The rights will expire on June 23, 2007, unless earlier redeemed or
exchanged. As part of the Rights Plan, Cambridge designated 100,000 shares of
its preferred stock as Series A Junior Participating Preferred Stock and
reserved such shares for issuance upon exercise of the rights. On March 12,
2001, Novell, Inc. ("Novell") announced it had entered into a definitive
agreement to acquire Cambridge. On March 12, 2001, the Board of Directors of
Cambridge approved an amendment to the Rights Agreement that rendered the Rights
Plan inapplicable to the contemplated Novell transaction.

                                      24
<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
-------   --------------------------------

(a)  Exhibits:

     2.1(1)   Agreement and Plan of Reorganization by and among the Company,
              Novell, Inc. and Ceres Neptune Acquisition Corp. dated March 12,
              2001.
     3(i)(2)  Amended and Restated Certificate of Incorporation of the
              Company, as amended.
     3(ii)(3) Amended and Restated By-laws of the Company.
     4.1(4)   Rights Agreement dated June 23, 1997 by and between the Company
              and ChaseMellon Shareholder Services, LLC ( the "Rights
              Agreement").
     4.2(5)   Amendment No. 1 to the Rights Agreement dated September 30, 1998
              by and between the Company and ChaseMellon Shareholder Services,
              LLC.
     4.3(1)   Amendment No. 2 to the Rights Agreement dated March 12, 2001, by
              and between the Company and ChaseMellon Shareholder Services, LLC.
     11       Statement Regarding Computation of Per Share Earnings.
-------------------------------------------------------------------------------
            (1) Incorporated herein by reference to the Company's current report
                on Form 8-K dated March 13, 2001.
            (2) Incorporated herein by reference to Exhibit 3.1 to the Company's
                Report on Form 10-Q for the period ended June 30, 1998.
            (3) Incorporated herein by reference to Exhibit 3.2 to the Company's
                Registration Statement on Form S-1 (File No. 33-56338).
            (4) Incorporated herein by reference to Exhibit 4.1 to the Company's
                Registration Statement on Form 8-A/A filed on September 30,
                1998.
            (5) Incorporated herein by reference to Exhibit 4.2 to the Company's
                Registration Statement on Form 8-A/A filed on September 30,
                1998.



(b)  Reports on Form 8-K:

     The Company filed one current report on Form 8-K during the three months
     ended March 31, 2001 on March 13, 2001 to announce the entry into an
     Agreement and Plan of Reorganization by and among the Company, Novell Inc.,
     and Ceres Neptune Acquisition Corp.

                                      25
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.



        Date:  May 15, 2001         By: /s/ John J. Gavin, Jr.
                                       -------------------------
                                       John J. Gavin, Jr.
                                       Senior Vice President and
                                          Chief Financial Officer

                                    By: /s/ Thomas G. Mackiewicz
                                       ---------------------------
                                       Thomas G. Mackiewicz
                                       Vice President, Controller and
                                          Chief Accounting Officer

                                      26
<PAGE>

                                 EXHIBIT INDEX
   Exhibit No.       Description
   -----------       -----------

     2.1(i)   Agreement and Plan of Reorganization by and among the Company,
              Novell, Inc. and Ceres Neptune Acquisition Corp. dated March 12,
              2001.
     3(i)(2)  Amended and Restated Certificate of Incorporation of the
              Company, as amended.
     3(ii)(3) Amended and Restated By-laws of the Company.
     4.1(4)   Rights Agreement dated June 23, 1997 by and between the Company
              and ChaseMellon Shareholder Services, LLC (the "Rights
              Agreement").
     4.2(5)   Amendment No. 1 to the Rights Agreement dated September 30, 1998
              by and between the Company and ChaseMellon Shareholder Services,
              LLC.
     4.3(1)  Amendment No. 2 to the Rights Agreement dated March 12, 2001, by
             and between the Company and ChaseMellon Shareholder Services, LLC.
     11      Statement Regarding Computation of Per Share Earnings.
 -------------------------------------------------------------------------------
            (1) Incorporated herein by reference to the Company's current report
                on Form 8-K dated March 13, 2001.
            (2) Incorporated herein by reference to Exhibit 3.1 to the Company's
                Report on Form 10-Q for the period ended June 30, 1998.
            (3) Incorporated herein by reference to Exhibit 3.2 to the Company's
                Registration Statement on Form S-1 (File No. 33-56338).
            (4) Incorporated herein by reference to Exhibit 4.1 to the Company's
                Registration Statement on Form 8-A/A filed on September 30,
                1998.
            (5) Incorporated herein by reference to Exhibit 4.2 to the Company's
                Registration Statement on Form 8-A/A filed on September 30,
                1998.



(b)  Reports on Form 8-K:

     The Company filed one current report on Form 8-K during the three months
     ended March 31, 2001 on March 13, 2001 to announce the entry into an
     Agreement and Plan of Reorganization by and among the Company, Novell Inc.,
     and Ceres Neptune Acquisition Corp.


                                      27