<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

[X]    Quarterly Report Pursuant to Section 13 or 15(d)
       of the Securities Exchange Act of 1934
       For the Fiscal Quarter Ended January 27, 1996

                              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:  0-13351

                 NOVELL, INC.
(Exact name of registrant as specified in its charter)

          Delaware                        87-0393339
(State or other jurisdiction of       (I.R.S. Employer
 incorporation or organization)      Identification No.)
                                     

               1555 N. Technology Way
                  Orem, Utah 84057
(Address of principal executive offices and zip code)

                   (801) 222-6000
(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

As  of February  24, 1996  there were  365,696,078 shares  of the
registrant's common stock outstanding.

</PAGE>
<PAGE>
<TABLE>

Part I.  Financial Information, Item 1.  Financial Statements

NOVELL, INC.
CONSOLIDATED UNAUDITED CONDENSED BALANCE SHEETS

<S>                                                   <C>          <C>
                                                      Jan. 27,     Oct. 28,
Dollars in thousands, except per share data               1996         1995
---------------------------------------------------------------------------
ASSETS

Current assets
  Cash and short-term investments                  $1,247,924    $1,321,231 
  Receivables, less  allowances  
     ($64,833 -  January;  
      $74,857 - October)                              518,027       470,437 
  Inventories                                          25,469        23,025 
  Prepaid expenses                                     46,641        50,576 
  Deferred income taxes                                66,749        59,913 
---------------------------------------------------------------------------

Total current assets                                1,904,810     1,925,182 

Property, plant and equipment, net                    379,155       390,452
Other assets                                           71,299       101,196 
---------------------------------------------------------------------------
Total assets                                       $2,355,264    $2,416,830 
===========================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Accounts payable                                    $78,471      $116,305 
  Accrued compensation                                 71,099        97,637 
  Accrued marketing liabilities                        76,119        72,339 
  Other accrued liabilities                           108,466        90,623 
  Income taxes payable                                 44,867        29,942 
  Deferred revenue                                     64,877        54,099 
---------------------------------------------------------------------------

Total current liabilities                             443,899       460,945 

Minority interests                                     16,903        17,623 

Shareholders' equity
  Common stock, par value $.10 a share
      Authorized - 600,000,000 shares
      Issued - 365,516,551 shares-January          
               371,567,158 shares-October              36,552        37,157
  Additional paid-in capital                          639,622       737,481
  Retained earnings                                 1,218,288     1,163,624
---------------------------------------------------------------------------

Total shareholders' equity                          1,894,462     1,938,262 
---------------------------------------------------------------------------

Total liabilities and shareholders' equity         $2,355,264    $2,416,830 
===========================================================================


See notes to consolidated unaudited condensed financial statements.
</TABLE>
</PAGE>

<PAGE>
<TABLE>

NOVELL, INC.
CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF INCOME
--------------------------------------------------------------------------

                                                     Fiscal Quarter Ended      
                                                     --------------------
<S>                                                <C>             <C>         
                                      
Amounts in thousands,                              Jan. 27,        Jan. 28,
except per share data                                  1996            1995
---------------------------------------------------------------------------

Net sales                                          $437,919        $493,225  
Cost of sales                                        96,011         116,875  
---------------------------------------------------------------------------
 
Gross profit                                        341,908         376,350  

Operating expenses  
 Sales and marketing                                123,465         139,803  
 Product development                                 78,633          89,817  
 General and administrative                          38,538          33,970  
 Restructuring charges                               18,442            --  
---------------------------------------------------------------------------

Total operating expenses                            259,078         263,590  
Income from operations                               82,830         112,760  

Other income (expense)
 Investment income                                   14,900           9,567  
 Other, net                                         (2,150)             258   
---------------------------------------------------------------------------

Other income, net                                    12,750           9,825  
---------------------------------------------------------------------------

Income before taxes                                  95,580         122,585  
Income taxes                                         32,019          41,066  
---------------------------------------------------------------------------

Net income                                         $ 63,561        $ 81,519  
===========================================================================

Weighted average shares outstanding                 371,585         372,027  
===========================================================================

Net income per share                                 $ 0.17          $ 0.22  
===========================================================================





See notes to consolidated unaudited condensed financial statements.



</PAGE>
</TABLE>

<PAGE>
<TABLE>

NOVELL, INC.
CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------

                                                      Fiscal Quarter Ended
                                                      --------------------
<S>                                                  <C>           <C>
                                                     Jan. 27,      Jan. 28,
Amounts in thousands                                     1996          1995
---------------------------------------------------------------------------

Cash flows from operating activities

  Net income                                          $63,561      $81,519 

Adjustments to reconcile net income to net cash
provided (used) by operating activities
  Depreciation and amortization                        24,919        23,067 
  Stock plans income tax benefits                       2,343         4,734 
  (Increase) in receivables                          (47,590)      (30,250) 
  (Increase) decrease in inventories                  (2,444)         5,717 
  Decrease in prepaid expenses                          3,935        11,852 
  (Increase) in deferred income taxes                 (1,122)       (1,505)
  (Decrease) in current liabilities, net             (17,046)      (15,530)
---------------------------------------------------------------------------

Net cash provided from operating activities            26,556        79,604 
---------------------------------------------------------------------------

Cash flows from financing activities
  Issuance of common stock, net                         5,597         7,667 
  Repurchase of common stock                        (106,117)           --     
---------------------------------------------------------------------------

Net cash (used) provided from 
  financing activities                              (100,520)         7,667

Cash flows from investing activities
  Expenditures for property, plant 
    and equipment                                    (12,784)       (9,372)
  (Increase) in short-term investments               (30,324)      (93,021)
  Other                                                22,590         8,564 
---------------------------------------------------------------------------

Net cash used by investing activities                (20,518)      (93,831)
---------------------------------------------------------------------------

Total (decrease) in cash and cash equivalents       $(94,482)      $(6,560)
Cash and cash equivalents - beginning of period       312,164       228,426 
---------------------------------------------------------------------------
 
Cash and cash equivalents - end of period             217,682       221,866 
Short-term investments - end of period              1,030,242       739,404 
---------------------------------------------------------------------------

Cash and short-term investments - end of period    $1,247,924      $961,270 
===========================================================================



See notes to consolidated unaudited condensed financial statements.


</TABLE>
</PAGE>


<PAGE>

NOVELL, INC.
NOTES TO CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS

A.  Quarterly Financial Statements

    The  accompanying  consolidated unaudited  condensed  financial
    statements   have  been   prepared  in   accordance  with   the
    instructions  to  Form 10-Q  but  do  not  include  all of  the
    information  and  footnotes  required  by   generally  accepted
    accounting  principles  and  should   therefore,  be  read   in
    conjunction with  the Company's  fiscal 1995  Annual Report  to
    Shareholders.     These  statements  do   include  all   normal
    recurring  adjustments which the Company believes necessary for
    a  fair presentation of the statements.   The interim operating
    results are  not necessarily  indicative of the  results for  a
    full year.  

B.  Significant Events

    In December 1995, Novell  sold its UnixWare product line to the
    Santa Cruz  Operation,  Inc.  (SCO).   The  Company realized  a
    small gain and  recorded $19  million of  royalty revenue  from
    this transaction  in the first quarter  of fiscal  1996.  Under
    the agreement, Novell received  approximately 6 million  shares
    of SCO  common  stock, resulting  in an  ownership position  of
    approximately 17%  of the  outstanding SCO  common stock.   The
    agreement  also calls for  Novell to  receive a  revenue stream
    from  SCO  based  on  revenue  performance   of  the  purchased
    UnixWare product  line.  This revenue  stream is  not to exceed
    $84 million  net present value, and will end  by the year 2002.
    In  addition, Novell  will  continue  to receive  revenue  from
    existing  licenses for  older versions  of  UNIX System  source
    code.

    In March 1996, the Company  completed the sale of  its personal
    productivity  applications product  line to  Corel  Corporation
    (Corel).  The Company received approximately  10 million shares
    of  Corel common  stock and approximately $11  million in cash.
    The Company will also be  entitled to nominate a  candidate for
    Corel s Board  of Directors.  The  Company expects  to report a
    slight one-time  extraordinary gain  in its  second quarter  of
    fiscal  1996.   Additionally, Corel  licensed GroupWise  Client
    software,  Envoy  electronic  publishing  software,  and  other
    technologies from  Novell for a  minimum royalty obligation  of
    $70 million over the next five years.

C.  Cash and Short-term Investments

    All marketable debt and equity securities are  included in cash
    and short-term  investments and  are considered  available-for-
    sale  and carried  at  fair market  value, with  the unrealized
    gains  and  losses,  net  of  tax,  included  in  shareholders 
    equity.   Such  securities  are  anticipated  to  be  used  for
    current  operations and  are  therefore classified  as  current
    assets,  even though  some  maturities  may extend  beyond  one
    year.
</PAGE>

<PAGE>
<TABLE>

The following is a summary of cash  and short-term investments,
all of which are considered available-for-sale.

<S>                                <C>               <C>          <C>           <C>             
      
                                                     Gross        Gross         Fair Market
                                   Cost at           Unrealized   Unrealized    Value at
(Dollars in thousands)             Jan. 27, 1996     Gains        Losses        Jan. 27, 1996
-------------------------------------------------------------------------------------------
Cash and cash equivalents                                      
  Cash                             $128,629          $ --         $ --           $128,629
  Repurchase agreements              34,989            --           --             34,989
  Tax exempt money market fund        9,764            --           --              9,764
  Municipal securities               44,300            --           --             44,300
-------------------------------------------------------------------------------------------
Cash and cash equivalents          $217,682          $ --         $ --           $217,682
-------------------------------------------------------------------------------------------
Short-term investments
  Municipal securities             $366,221          $5,236       $ --           $371,457
  Money market mutual funds          46,383            --           --             46,383
  Money market preferreds           425,300               4         --            425,304
  Mutual funds                       87,414              56         --             87,470
  Equity securities                  81,677          17,951         --             99,628
-------------------------------------------------------------------------------------------
Short-term investments           $1,006,995         $23,247       $ --         $1,030,242
-------------------------------------------------------------------------------------------
Cash and short-term 
  investments                    $1,224,677         $23,247       $ --         $1,247,924
-------------------------------------------------------------------------------------------
</TABLE>

<TABLE>

<S>                               <C>                <C>           <C>           <C>
                                                     Gross         Gross         Fair Market
                                  Cost  at           Unrealized    Unrealized    Value at
(Dollars in thousands)            Oct. 28, 1995      Gains         Losses        Oct. 28, 1995
----------------------------------------------------------------------------------------------

Cash and cash equivalents                                      
  Cash                            $152,930           $ --           $ --            $152,930
  Repurchase agreements             23,794             --             --              23,794
  Tax exempt money market fund      63,065             --             --              63,065
  Municipal securities              72,375             --             --              72,375
---------------------------------------------------------------------------------------------
Cash and cash equivalents         $312,164           $ --           $ --            $312,164
---------------------------------------------------------------------------------------------

Short-term investments
  Municipal securities            $375,491          $3,220          $ --            $378,711
  Money market mutual funds         38,475             --             --              38,475
  Money market preferreds          442,500             176            --             442,676
  Mutual funds                      91,423              30            --              91,453
  Equity securities                 23,055          34,697            --              57,752
---------------------------------------------------------------------------------------------
Short-term investments            $970,944         $38,123          $ --          $1,009,067
---------------------------------------------------------------------------------------------
Cash and short-term investments $1,283,108         $38,123          $ --          $1,321,231
---------------------------------------------------------------------------------------------

</TABLE>

During  the  first  quarter  of  fiscal  1996  the  Company had
realized  gains  of  $4  million  on  the  sale  of  securities
compared to  no realized gains in  the first  quarter of fiscal
1995.

</PAGE>

<PAGE>

D.  Income Taxes

    The Company's estimated  effective tax rate for both the  first
    quarter of fiscal  1996 and 1995 was  33.5%.  The Company  paid
    cash amounts  for income taxes of  $2 million  and $27 million,
    in the first quarter of fiscal 1996 and 1995, respectively.

E.  Commitments and Contingencies

    The Company  currently has  a $10  million unsecured  revolving
    bank  line of  credit, with  interest at  the prime  rate.  The
    line  can  be used  for  either  letter  of  credit or  working
    capital purposes.   The line is subject to  the terms of a loan
    agreement  containing  financial  covenants  and  restrictions,
    none  of  which  are  expected  to   significantly  affect  the
    Company s  operations.    At January  27,  1996  there  were no
    borrowings, letter of  credit acceptances or commitments  under
    such line.

    The Company has an  additional $10 million credit facility with
    another  bank which  is  not subject  to  a loan  agreement. At
    January 27,  1996 standby  letters of  credit of  approximately
    $300,000 were outstanding under this agreement.

    The Company is  a party to a number  of legal claims arising in
    the  ordinary course  of business.   The  Company believes  the
    ultimate resolution  of  the claims  will not  have a  material
    adverse  effect   on   its  financial   position,  results   of
    operations, or cash flows.

F.  International Sales 

    The Company markets internationally both directly  to end users
    and through  distributors who sell  to dealers  and end  users.
    For the fiscal quarters  ended January 27, 1996 and January 28,
    1995, sales to international customers were  approximately $218
    million and  $222 million, respectively.  In the first quarters
    of fiscal 1996 and fiscal  1995, 63% and 59%,  respectively, of
    international  sales  were  to  European  countries.    No  one
    foreign  country accounted  for 10% or  more of  total sales in
    either  period.   Except  for  one  multi-national distributor,
    which accounted  for 13%  of revenue  in the  first quarter  of
    1996  and 18% of  revenue in the first  quarter of fiscal 1995,
    no  customer accounted  for  more than  10%  of revenue  in any
    period.

G.  Net Income Per Share
    Net  income per  share is  computed using the  weighted average
    number  of  common  shares  outstanding  during   the  periods,
    including  common  stock  equivalents  (unless   antidilutive).
    Common stock equivalents consist of outstanding stock options.

</PAGE>

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Introduction    

Novell is  the world s leading  network software provider.   Novell
software  products  provide the  infrastructure    for a  networked
world, enabling Novell s customers to connect with other people and
the information they  need, anytime and anyplace.   Novell partners
with other  technology and  market leaders  to help customers  make
networks  a part of  their everyday lives.   Over the  past several
years, the  Company has issued common stock or paid cash to acquire
technology  companies, and  formed  strategic alliances  with still
other technology companies.  

In December 1995, Novell sold its UNIX and UnixWare product line to
the Santa Cruz Operation, Inc. (SCO).  The Company realized a small
gain  and  recorded  $19  million  of  royalty  revenue  from  this
transaction  in  the  first quarter  of  fiscal  1996.   Under  the
agreement, Novell  received approximately  6 million shares  of SCO
common stock,  resulting in an ownership  position of approximately
17% of the outstanding SCO common stock.  The agreement also  calls
for Novell  to receive a revenue  stream from SCO  based on revenue
performance of the  purchased UnixWare product line.   This revenue
stream is not to exceed $84 million net present value, and will end
by  the year 2002.   In addition,  Novell will  continue to receive
revenue  from existing licenses  for older versions  of UNIX System
source code.

In  March  1996, the  Company completed  the  sale of  its personal
productivity  applications  product   line  to  Corel   Corporation
(Corel).  The Company  received approximately 10 million shares  of
Corel  common stock  and approximately  $11 million  in cash.   The
Company will also be  entitled to nominate a candidate  for Corel s
Board of Directors.   The Company expects to  report a slight  one-
time extraordinary  gain  in its  second  quarter of  fiscal  1996.
Additionally,  Corel  licensed  GroupWise  Client  software,  Envoy
electronic publishing  software, and other technologies from Novell
for  a minimum royalty obligation of $70 million over the next five
years.

<TABLE>

<S>                               <C>          <C>            <C>
Results of Operations
-------------------------------------------------------------------
Net Sales
                                    Q1                           Q1
                                  1996         Change          1995
-------------------------------------------------------------------

Net sales (millions)               $438          -11%          $493
===================================================================

</TABLE>

Novell has four product  groups, all within the software  industry.
They are the NetWare Systems  Group, the Novell Applications Group,
the UNIX Systems Group,  and the Information Access  and Management
Group.  While revenue  decreased from the first quarter of  1995 to
the first  quarter  of 1996,  analysis  of the  individual  product
groups characterizes the changes that have occurred.

NetWare Systems Group (NSG) revenues declined by 12% or $30 million
in  the first  quarter of  1996 compared  to the  first  quarter of
1995.  Growth in the NetWare 4 product family of $58 million or 80%
growth from the  first quarter of  1995 was more  than offset by  a
decrease in  the NetWare 3 product  family of $78 million  or a 45%
decline from the first quarter of 1995.

Novell Applications  Group (NAG) revenues  decreased by 56%  or $78
million in the first quarter of 1996  compared to the first quarter
of  1995.   The decrease  is the  result of  an $84 million  or 67%
decrease,   quarter   over   quarter,  in   personal   productivity
applications  products,  due  to  the  Windows  application  market
slowdown  as customers  migrate  to  the  Windows 95  platform  and
Novell s  announced  intention  to  exit  this  line  of  business.
GroupWise,   the   Company s    electronic   messaging    workgroup
application,  contribution  $21  million  in   first  quarter  1996
revenue, a 39% increase from the year ago quarter.

UNIX Systems  Group  (USG)  revenues increased  98%  in  the  first
quarter  of  1996 compared  to  the  first quarter  of  1995.   The
increase was attributable to a one-time $19 million paid up royalty
recognized in the sale of UNIX and the UnixWare product line to SCO
in December 1995.

Information  Access and Management  Group (IAMG) revenues increased
by 40% in  the first quarter of 1996 compared  to the first quarter
of 1995.   The increase  was a  result of higher  revenues in  most
product  categories, with  a  particularly strong  increase in  the
network  management  products  as  a   result  of  the  release  of
ManageWise in October 1995.

</PAGE>

<PAGE>

International sales  represented 50% of  total sales  in the  first
quarter of 1996 compared to 45% in the first quarter of 1995.  This
change is a  result of a 19% decrease in domestic revenues compared
to a 2% decrease in international  revenues in the first quarter of
fiscal 1996 compared to the first quarter of fiscal 1995.

<TABLE>

<S>                                <C>          <C>           <C>
Gross Profit
                                     Q1                         Q1
                                   1996        Change         1995
-------------------------------------------------------------------
Gross profit (millions)            $342           -9%         $376 
Percentage of net sales             78%                        76%
===================================================================

</TABLE>

The  gross margin  percentage  increased in  the  first quarter  of
fiscal 1996  compared to  the first quarter  of fiscal 1995  due to
lower material  costs  and  variances  somewhat  offset  by  higher
royalties, training  and education  costs and  service  costs as  a
percentage of  revenues.  Future  fluctuations in the  gross profit
margin will be primarily attributable to  price changes, changes in
sales  mix by product or distribution  channel, and special product
promotions.  

<TABLE>

<S>                                    <C>           <C>           <C>
Operating Expenses
                                        Q1                         Q1   
                                        1996         Change        1995   
-----------------------------------------------------------------------
Sales and marketing (millions)          $123          -12%         $140   
Percentage of net sales                  28%                        28%
-----------------------------------------------------------------------
Product development (millions)          $79           -12%          $90   
Percentage of net sales                 18%                         18%
-----------------------------------------------------------------------
General and administrative (millions)   $39           -15%          $34   
Percentage of net sales                  9%                          7%
-----------------------------------------------------------------------
Restructuring charges (millions)        $18            --            --    
Percentage of net sales                  4%                          --  
-----------------------------------------------------------------------
Total operating expenses (millions)    $259            -2%         $264
Percentage of net sales                 59%                         53%
=======================================================================

</TABLE>

Sales and marketing expenses  remained flat as a percentage  of net
sales in  the first quarter  of fiscal 1996  compared to  the first
quarter  of fiscal  1995.   The  decrease  in absolute  dollars  is
attributable  to  lower  domestic  sales  expenses  and   corporate
marketing expenses.   Sales and marketing  expenses fluctuate as  a
percentage  of net  sales  in  any  given  period  due  to  product
promotions, advertising or other discretionary expenses.

Product  development expenses remained flat as  a percentage of net
sales in  the first  quarter of fiscal  1996 compared to  the first
quarter  of  fiscal 1995  but decreased  in  absolute dollars  as a
result of lower headcount and third party development costs.

General and administrative  expenses increased as  a percentage  of
net sales in the first quarter of fiscal 1996 compared to the first
quarter of fiscal  1995.   The increase is  attributable to  higher
information services and human resources costs.

During the first quarter of 1996, the Company wrote off $18 million
of    tax  deductible  restructuring  charges  for  severance   and
redundant  facilities as the Company  prepared for the  sale of its
personal productivity applications business.

Overall,  operating expenses, excluding  nonrecurring charges, have
declined  more rapidly than revenues in the first quarter of fiscal
1996 compared to  the first quarter of fiscal  1995 due to company-
wide  cost controls  as  the Company  took  significant actions  to
refocus Novell to network software.

<TABLE>

<S>                                       <C>          <C>             <C> 
                                           Q1                          Q1
                                           1996        Change          1995
---------------------------------------------------------------------------
Employees                                 7,137          -6%          7,808
Annualized revenue per employee (000's)    $235          -3%           $243
===========================================================================

</TABLE>
</PAGE>
<PAGE>

In the first quarter of 1995, Novell  reduced its employment by 625
employees  as the  Company prepared  for the  sale of  its personal
productivity applications business.


<TABLE>

<S>                                        <C>         <C>           <C>
Other Income (Expense)
                                           Q1                         Q1
                                           1996        Change         1995 
--------------------------------------------------------------------------
Other income (expense), net (millions)     $13           30%          $10 
Percentage of net sales                     3%                         2%
==========================================================================

</TABLE>

The  primary  component of  other  income  (expense) is  investment
income, which was $15 million  in the first quarter of  fiscal 1996
compared  to $10 million in the first  quarter of fiscal 1995.  The
increase is the  result of higher average cash balances  as well as
higher  average yields.   In  order  to achieve  potentially higher
returns, a limited portion of the Company's investment portfolio is
invested in mutual funds which incur some market risk.  The Company
believes that the market risk  has been limited by  diversification
and  by use  of a  funds management  timing service  which switches
funds out of mutual  funds and into money market funds  when preset
signals occur.  

<TABLE>
 
<S>                                      <C>            <C>           <C>
Income Taxes
                                          Q1                          Q1
                                          1996          Change        1995
--------------------------------------------------------------------------
Income taxes (millions)                    $32            -22%         $41
Percentage of net sales                     7%                          8%
Effective tax rate                         34%                         34%
==========================================================================

</TABLE>

The  Company's estimated tax rate for  fiscal 1996 is 33.5%, the same
as in fiscal 1995.

<TABLE>

<S>                                     <C>           <C>             <C>
Net Income and Net Income Per Share

                                          Q1                            Q1
                                        1996          Change          1995
--------------------------------------------------------------------------
Net income (millions)                    $64           -22%            $82
Percentage of net sales                  15%                           17%
Net income per share                    $.17           -23%           $.22
==========================================================================


</TABLE>
<TABLE>

<S>                                            <C>         <C>            <C>
Liquidity and Capital Resources      

                                               Q1                          Q4
                                               1996        Change          1994
-------------------------------------------------------------------------------
Cash and short-term investments (millions)   $1,248           -6%        $1,321
Percentage of total assets                      53%                         55%
===============================================================================

</TABLE>

</PAGE>

<PAGE>

Cash  and  short-term investments  decreased  to  $1,248 million  at
January 27, 1996 from $1,321 million at October 28, 1995.  The major
reason for this  decrease was  the $106 million  used to  repurchase
Novell common stock during the quarter, offset by the $27 million of
cash provided  by operating activities,  the $5 million  provided by
other  financing activities, and  the $10 million  provided by other
investing activities.  The investment portfolio is diversified among
security types,  industry  groups,  and  individual  issuers.    The
Company's principal source  of liquidity has  been from  operations.
At  January  27, 1996,  the  Company's principal  unused  sources of
liquidity consisted of cash and short-term investments and available
borrowing  capacity of  approximately $20  million under  its credit
facilities.  The  Company's liquidity needs are  principally for the
Company's   financing  of   accounts  receivable,   capital  assets,
acquisitions and strategic investments and to have flexibility  in a
dynamic and competitive operating environment.

During the first fiscal  quarter of 1996, the Company  has continued
to  generate cash from  operations.   The Company  anticipates being
able to fund its current operations and capital expenditures planned
for  the  foreseeable  future  with  existing  cash  and  short-term
investments together  with internally  generated funds.   Borrowings
under the Company's credit facilities, or public offerings of equity
or debt securities are available if the need arises.  As the Company
grows, investments will  continue in product development in  new and
existing areas of  technology.   Cash may  also be  used to  acquire
technology through  purchases and  strategic acquisitions.   Capital
expenditures in fiscal 1996 are anticipated to  be approximately $60
million,  but could be reduced if the  growth of the Company is less
than presently  anticipated.  In addition, the Company has announced
a  share repurchase  program whereby  the Company  is authorized  to
repurchase  up to 37 million shares of  its common stock in the open
market  during fiscal  1996.   During  the  first quarter  of  1996,
approximately 7  million shares  were repurchased and  retired at  a
cost of approximately $106 million.

Forward Looking Information

Looking  forward to  its second  fiscal quarter,  Novell decided  to
implement a  change to its traditional  distribution stocking policy
that will significantly reduce revenue and earnings in that quarter.
Because the  Company is  experiencing rapid growth  in revenue  from
expanding  multi-product  network software  licensing  programs, the
Company has decided  to reduce and rebalance  channel inventories to
change  the mix of product in the  channel and better match evolving
purchase  patterns.     The  Company  intends   to  reduce   product
inventories by  up to $225 million across its worldwide distribution
channels in its second quarter of 1996.  This reduction  is expected
to decrease second  quarter revenue  by a  corresponding amount  and
will likely result in a moderate loss in the quarter.  The resetting
of channel inventories is  expected to reduce ongoing cost  of sales
and lessen  costs associated  with  channel promotions  and  product
rotations, thereby leading  to improved earnings in  the second half
of the year.

The  above statements  relating to  Novell s change  in distribution
stocking  policy are forward looking  and involve a  number of risks
and uncertainties.  As such, actual  results could materially differ
from those  we are projecting  in these forward  looking statements.
Unanticipated  declines in  revenue due  to competitive,  market and
general  economic factors could limit  the Company s ability to gain
the  benefit of  improved earnings  resulting from  the new  channel
inventory structure.   Novell s projections of  increasing licensing
revenue are  based on historical trends which,  should they reverse,
would negatively impact growth projections of revenue and  earnings.
Further  uncertainties  are  associated  with  any  impact  to   our
distribution  channel resulting  from  this  change in  distribution
stocking  policy.    Novell believes  this  action  is  in the  best
interests of  its customers, channel partners  and shareholders, but
implementing  this program  may result  in some  short-term business
interruption as  the  Company,  our  partners,  and  customers  work
through this change.
</PAGE>

<PAGE>

Part II. Other Information

Except as listed below, all information required by items in Part II
is  omitted  because the  items are  inapplicable  or the  answer is
negative.

Item 1.  Legal Proceedings.

The information  required by  this  item is  incorporated herein  by
reference to  Footnote  E  of  the  Company s  financial  statements
contained in Part I, Item 1 of this Form 10-Q.

Item 6.  Exhibits and Reports on Form 8-K.

(a)   Exhibits

Exhibit
Number            Description
-------           -------------
  27*             Financial Data Schedule

(b)   Reports on Form 8-K.


No reports  on Form  8-K were  filed by  the  Registrant during  the
quarter ended January 27, 1996.

--------------------------                      
*Filed herewith

</PAGE>

<PAGE>

                       SIGNATURES



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




                                     Novell, Inc.
                                     ------------
                                     (Registrant)



Date:  March 12, 1996                /s/ Robert J. Frankenberg
                                     -------------------------
                                     Robert J. Frankenberg
                                     Chairman of the Board,
                                     President, Chief Executive
                                     Officer and Director
                                     (Principal Executive Officer)



Date:  March 12, 1996                /s/ James R. Tolonen
                                     -------------------------
                                     James R. Tolonen
                                     Executive Vice President and 
                                     Chief Financial Officer 
                                     (Principal Financial Officer)



Date:  March 12, 1996                /s/ Stephen C. Wise
                                     -------------------------
                                     Stephen C. Wise
                                     Senior Vice President, Finance
                                     (Principal Accounting Officer)

</PAGE>