<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 31, 1997

                                 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)               dentification No.)


                         122 East 1700 South
                          Provo, Utah 84606
     (Address of principal executive offices and zip code)

                           (801) 861-7000
     (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  28, 1997 there  were 346,876,410 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. 31,         Oct. 26,
Dollars in thousands, except per share data          1997             1996
---------------------------------------------------------------------------
ASSETS

Current assets
  Cash and short-term investments             $ 1,102,321      $ 1,024,755
  Receivables, less allowances 
       ($58,669 - January; 
        $60,940 - October)                        393,490          452,327
  Inventories                                      20,201           16,837
  Prepaid expenses                                 53,578           59,009
  Deferred income taxes                            51,085           37,831
---------------------------------------------------------------------------

Total current assets                            1,620,675        1,590,759

Property, plant and equipment, net                400,516          394,684
Other assets                                       61,812           64,023
---------------------------------------------------------------------------

Total assets                                  $ 2,083,003      $ 2,049,466
===========================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities 
  Accounts payable                            $    73,518      $    96,933
  Accrued compensation                             50,207           54,731
  Accrued marketing liabilities                    50,999           48,402
  Other accrued liabilities                        94,651          118,133
  Income taxes payable                             34,231            
  Deferred revenue                                 49,976           46,573
---------------------------------------------------------------------------

Total current liabilities                         353,582          364,772

Minority interests                                 16,540           17,035
Put Warrants                                       46,650           52,150

Shareholders' equity
  Common stock, par value $.10 a share
      Authorized -  600,000,000 shares
      Issued - 346,742,970 shares-January
               346,059,050 shares-October          34,674           34,606
  Additional paid-in capital                      316,004          309,831
  Retained earnings                             1,317,469        1,266,657
  Unearned stock compensation                      (2,239)          (4,141)
  Cumulative translation adjustment                   679            1,183
  Unrealized gain (loss) on investments              (356)           7,373
---------------------------------------------------------------------------
 
Total shareholders' equity                      1,666,231        1,615,509
---------------------------------------------------------------------------
 
Total liabilities and shareholders' equity    $ 2,083,003     $  2,049,466
===========================================================================

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. 31,             Jan. 27,
except per share data                            1997                 1996
---------------------------------------------------------------------------

Net sales                                    $374,847             $437,919
Cost of sales                                  75,971               96,011
---------------------------------------------------------------------------
 
Gross profit                                  298,876              341,908

Operating expenses  
 Sales and marketing                          127,890              123,465
 Product development                           71,755               78,633
 General and administrative                    37,731               38,538
    Restructuring charges                          __               18,442
---------------------------------------------------------------------------

Total operating expenses                      237,376              259,078
Income from operations                         61,500               82,830

Other income (expense)
 Investment income                             16,614               14,900
 Other, net                                    (2,837)              (2,150)
---------------------------------------------------------------------------

Other income, net                              13,777               12,750
---------------------------------------------------------------------------

Income before taxes                            75,277               95,580
Income taxes                                   24,465               32,019
---------------------------------------------------------------------------

Net income                                   $ 50,812             $ 63,561
===========================================================================
  
Weighted average shares outstanding           347,095              371,585
===========================================================================
 
Net income per share                         $   0.15             $   0.17
===========================================================================


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

<PAGE>
<TABLE>
                           NOVELL, INC.
    CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

<S>                                                       <C>             <C>

                                                             Fiscal Quarter Ended
                                                          ------------------------      
        
                                                           Jan. 31,       Jan. 27,
Amounts in thousands                                          1997           1996 
-----------------------------------------------------------------------------------

Cash flows from operating activities

  Net income                                            $   50,812      $  63,561

Adjustments to reconcile net income to net cash
provided (used) by operating activities
  Depreciation and amortization                             23,816         24,919
  Stock plans  income tax benefits                           1,803          2,343
  Decrease (increase) in receivables                        58,837        (47,590)
  (Increase) in inventories                                 (3,364)        (2,444)
  Decrease in prepaid expenses                               5,431          3,935
  (Increase) in deferred income taxes                      (13,049)        (1,122)
  (Decrease) in current liabilities, net                   (11,190)        (17,046)
-----------------------------------------------------------------------------------

Net cash provided from operating activities                113,096          26,556
-----------------------------------------------------------------------------------

Cash flows from financing activities
  Issuance of common stock, net                              2,685           5,597
  Repurchases of common stock                                   --        (106,117)
  Sale of put warrants                                       2,300              --
  Settlement of put warrants                                (6,250)             --
----------------------------------------------------------------------------------- 

Net cash (used) from financing activities                   (1,265)       (100,520)
-----------------------------------------------------------------------------------
 

Cash flows from investing activities
  Expenditures for property, plant and equipment           (27,543)        (12,784)
  Purchases of short-term investments                     (714,467)     (1,062,216)
  Maturities of short-term investments                     506,110         889,193
  Sales of short-term investments                          166,868         161,820
  Other                                                      1,007           3,469
-----------------------------------------------------------------------------------

Net cash (used) by investing activities                    (68,025)        (20,518)
-----------------------------------------------------------------------------------
 

Total Increase (decrease) in cash and cash equivalents  $   43,806      $  (94,482)
Cash and cash equivalents - beginning of period            145,521         312,164 
-----------------------------------------------------------------------------------
 
Cash and cash equivalents - end of period                  189,327         217,682
Short-term investments - end of period                     912,994       1,030,242
-----------------------------------------------------------------------------------
 

Cash and short-term investments - end of period         $1,102,321      $1,247,924
===================================================================================

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  preparation  of  financial statements  in  conformity with
    generally  accepted  accounting principles  requires management
    to  make estimates  and  assumptions  that affect  the  amounts
    reported in  the financial  statements and accompanying  notes.
    Actual    results   could   differ   from   those   estimates.   
    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 1996  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.  

    In the first quarter  of fiscal 1997, the Company implemented a
    change to its fiscal year and  month ending dates.  The Company
    will  now recognize  its fiscal year  end on  the last calendar
    day of October, as opposed to prior years on the  last Saturday
    in October.   Likewise, each fiscal  month end will now  end on
    the last  calendar day of each  month, and  each fiscal quarter
    will have a unique number  of days as opposed to the consistent
    13 weeks in  prior years.   Implementing this change,  resulted
    in  an extra  five days  in the  first fiscal  quarter of  1997
    which the  Company believes did not  have a  material impact on
    its financial position, results of operations, or  cash flows. 

  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 UNIX technology 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 ownership 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.
    This  resulted in an ownership position of approximately 17% of
    the outstanding Corel  common stock.   The  Company reported  a
    one-time gain  of $20 million in  the second  quarter of fiscal
    1996 related  to this transaction.   Net  of tax, the  gain was
    $13 million, or $0.04 per share.  Additionally, Corel  licensed
    GroupWise   client   software,  Envoy   electronic   publishing
    software,  and other  technologies from  Novell  for a  minimum
    royalty obligation of  approximately $50 million over the  next
    five years.

    During  the  second   quarter  of  fiscal  1996,  the   Company
    implemented a change  to its traditional distribution  stocking
    policy that significantly reduced revenue and  earnings in that
    quarter.  Because the Company has experienced strong growth  in
    revenue from software licensing  programs, the Company  decided
    to   reduce  channel  inventories   to  better  match  evolving
    purchase  patters.    The Company  estimates  that  it  reduced
    product  inventories  in  the  worldwide  distribution  channel
    during  the second fiscal quarter of 1996 by approximately $225
    million.    This   was  accomplished   primarily  by   reducing
    shipments  to   distributors   during   the   second   quarter.
    Additionally, net  returns of  approximately  $20 million  were
    accepted  during the  second  quarter  related to  this  policy
    change. 
</PAGE>

<PAGE>
<TABLE>
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.      Municipal   securities   included  in   short-term
    investments have contractual maturities from 1-5  years.  Money
    market preferreds have  contractual maturities of less than  90
    days.    No  other  short-term  investments   have  contractual
    maturities.   The  cost of  securities  sold  is based  on  the
    specific   identification   method.     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.

    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
                                          Cost  at    Unrealized    Unrealized    Market Value at
(Dollars in thousands)               Jan. 31, 1997         Gains        Losses      Jan. 31, 1997
-------------------------------------------------------------------------------------------------


Cash and cash equivalents                                      
    Cash                               $   98,985      $     --     $      --          $   98,985
    Repurchase agreements                  19,740                          --              19,740
    Taxable money market fund              40,590                          --              40,590
    Municipal securities                   31,565                          --              31,565
-------------------------------------------------------------------------------------------------
Cash and cash equivalents              $  190,880      $            $      --          $  190,880
-------------------------------------------------------------------------------------------------

Short-term investments
    Municipal securities               $  408,805      $  2,481     $      --          $  411,286
    Money market preferreds               237,800            --            --             237,800
    Mutual funds                           95,682            30            (3)             95,709
    Equity securities                     169,734        33,617       (36,705)            166,646
-------------------------------------------------------------------------------------------------
Short-term investments                 $  912,021      $ 36,128     $ (36,708)         $  911,441
-------------------------------------------------------------------------------------------------
Cash and short-term investments        $1,102,901      $ 36,128     $ (36,708)         $1,102,321
-------------------------------------------------------------------------------------------------


                                                          Gross         Gross                Fair
                                         Cost  at    Unrealized    Unrealized     Market Value at
(Dollars in thousands)              Oct. 26, 1996         Gains        Losses       Oct. 26, 1996
-------------------------------------------------------------------------------------------------
Cash and cash equivalents                                      
    Cash                               $   77,374      $     --     $      --          $   77,374
    Repurchase agreements                   4,526            --            --               4,526
    Tax exempt money market fund           36,821            --            --              36,821
    Municipal securities                   26,800            --            --              26,800
-------------------------------------------------------------------------------------------------
Cash and cash equivalents              $  145,521      $     --     $      --          $  145,521
-------------------------------------------------------------------------------------------------

Short-term investments
    Municipal securities               $  376,510      $  1,524     $     (12)         $  378,022
    Money market mutual funds              78,514            --            --              78,514
    Money market preferreds               224,000            --            --             224,000
    Mutual funds                           14,151            14           (10)             14,155
    Equity securities                     174,054        35,432       (24,943)            184,543
-------------------------------------------------------------------------------------------------
Short-term investments                 $  867,229       $36,970$      (24,965)         $  879,234
-------------------------------------------------------------------------------------------------
Cash and short-term investments        $1,012,750       $36,970     $ (24,965)         $1,024,755
-------------------------------------------------------------------------------------------------

During the first quarter  of fiscal 1997 the  Company had  realized 
gains of $6 million on the sale of securities compared to  realized 
gains of $4 million in the first quarter of fiscal 1996.
</PAGE>
</TABLE>

<PAGE>
D. Income Taxes

   The  Company's  estimated  effective tax  rate  for  the  first
   quarter  of fiscal  1997  was 32.5%  compared  to 33.5%  in the
   first quarter  of fiscal 1996.   The Company  paid cash amounts
   for income  taxes of $3  million and $2  million, in the  first
   quarter of fiscal 1997 and 1996, 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  31,  1997  there  were no
    borrowings, letter of  credit acceptances or commitments  under
    such line.

    The Company has an additional $5  million credit facility  with
    another  bank which  is  not subject  to  a loan  agreement. At
    January 31,  1997 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.  Put Warrants                   

    In  the first  quarter  of fiscal  1997,  the Company  sold put
    warrants  on  2 million  shares  of  its  common  stock for  $2
    million, callable  on specific  dates in the  third quarter  of
    fiscal  1997, giving a third party  the right to sell shares of
    Novell common stock  to the Company at contractually  specified
    prices.  During the first  quarter of fiscal 1997,  the Company
    settled put warrants  obligations on 2 million shares for  cash
    of $6  million.   During  fiscal  1996,  the Company  sold  put
    warrants on  9  million shares  of  its  common stock  for  $12
    million, callable on  specific dates  in the  third and  fourth
    quarters of  fiscal 1996 and the  first and  second quarters of
    fiscal  1997.   During  fiscal 1996,  the Company  settled  put
    warrant  obligations  on  5  million  shares  for  cash  of  $6
    million.  The put warrant  liability is the amount  the Company
    would be obligated to pay  if all the outstanding  put warrants
    were exercised at  the strike price without a cash  settlement.
    The  proceeds  from  the  issuance  of  the  put  options  were
    accounted for  as  additional  paid-in-capital.    The  Company
    expects to settle  the put  warrant obligations  with cash  and
    thereby  eliminate the liability.   As of the  end of the first
    quarter  of   fiscal  1997,  the   cash  settlement  would   be
    approximately $2 million.  

G.  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 31, 1997 and January 27,
    1996, sales to international customers were  approximately $172
    million and  $218 million, respectively.  In the first quarters
    of fiscal 1997 and fiscal  1996, 62% and 63%,  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 18%  of revenue  in the  first quarter  of
    1997 and  13% of revenue in  the first quarter  of fiscal 1996,
    no  customer accounted  for  more than  10%  of revenue  in any
    period.

H.  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.   The
Company offers  a wide range  of network solutions  for distributed
network, Internet, intranet and small-business markets. 

During  fiscal   1996,  Novell  sold  its   UnixWare  and  personal
productivity applications product lines in exchange for significant
ownership interests in  the two acquiring  companies.  Also  during
fiscal 1996,  the Company significantly  reduced the amount  of its
product  held  by  distributors  by  reducing  shipments  into  the
distribution channel  by approximately  $225 million in  the second
quarter.  These actions  significantly reduced fiscal 1996 reported
revenue and make meaningful year-to-year comparisons difficult.  

In  the first  quarter of  fiscal 1997,  the Company  implemented a
change to its fiscal year and month ending dates.  The Company will
now  recognize its  fiscal year  end on  the last  calendar day  of
October, as opposed to prior years on the last Saturday in October.
Likewise, each  fiscal month end will now  end on the last calendar
day of  each month,  and each  fiscal  quarter will  have a  unique
number of  days as  opposed to  the consistent  13  weeks in  prior
years.  Implementing this change, resulted in an extra five days in
the first fiscal quarter of 1997 which the Company believes did not
have  a  material impact  on  its  financial position,  results  of
operations, or cash flows

Results of Operations

Net Sales
                                    Q1                          Q1
                                  1997       Change           1996
-------------------------------------------------------------------

Net sales (millions)              $375          -14%          $438
===================================================================

Novell s  product lines can  be categorized  into three  areas, all
within  the   software  industry.     They  are   server  operating
environments;  network  services;  UNIX royalties,  and  education,
service  and other.  While revenue decreased from the first quarter
of 1996 to  the first quarter of  1997, analysis of  the individual
product categories characterizes the changes that have occurred.

Server  operating environments  revenues  increased by  10% or  $23
million in the first quarter of 1997 compared to the first  quarter
of  1996.  Growth in the IntranetWare product family of $54 million
or 41% growth from the first quarter of 1996 was somewhat offset by
a decrease in the NetWare 3 product family of $31 million  or a 32%
decline from the first quarter of 1996.

Network  services revenues decreased by  14% or $13  million in the
first quarter of 1997 compared  to the first quarter of 1996.   The
decrease  is  mainly the  result  of  decreases  in  TCP/IP  access
products of $13  million, Host Connectivity products  of $3 million
and NetWare multi-protocol router of $2 million, somewhat offset by
34% growth or  a $7  million increase in  GroupWise, the  Company s
electronic messaging workgroup application.

UNIX  royalties revenue decreased 68%  or $21 million  in the first
quarter of  1997  compared to  the  first  quarter of  1996.    The
decrease 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 the first quarter of 1996.  

Education,  service and  other  revenues  decreased  by 21%  or  $9
million in the first quarter of 1997 compared to  the first quarter
of 1996.  The decrease  was a result of lower revenues  in training
and other product categories,  with an increase in  service related
revenue.  

International sales  represented 46%  of total  sales in the  first
quarter of 1997 compared to 50% in the first quarter of 1996.  This
change is a result  of a 8% decrease in  domestic revenues compared
to a 21% decrease in international revenues in the first quarter of
fiscal 1997 compared to the first quarter of fiscal 1996.
</PAGE>

<PAGE>
Gross Profit
                                            Q1                  Q1
                                          1997     Change     1996
------------------------------------------------------------------
Gross profit (millions)                   $299        -13%    $342 
Percentage of net sales                     80%                 78%
==================================================================

The  gross  margin percentage  increased  in the  first  quarter of
fiscal 1997 compared  to the  first quarter of  fiscal 1996 due  to
lower  material costs due to  an increase in  licensing revenue and
the decrease  in sales from the lower  margin personal productivity
applications product line.   

Operating Expenses
                                            Q1                 Q1   
                                          1997     Change    1996 
-----------------------------------------------------------------  
Sales and marketing (millions)            $128          4%   $123   
Percentage of net sales                     34%                28%
-----------------------------------------------------------------
Product development (millions)             $72         -9%     $79   
Percentage of net sales                     19%                 18%
------------------------------------------------------------------
General and administrative (millions)      $38         -3%     $39   
Percentage of net sales                     10%                  9%
------------------------------------------------------------------
Restructuring charges (millions)            --          --     $18
Percentage of net sales                     --                   4%
------------------------------------------------------------------
Total operating expenses (millions)       $237          -8%   $259   
Percentage of net sales                     63%                 59%
==================================================================

Sales and marketing expenses increased as a percentage of net sales
in  the first quarter of fiscal 1997  compared to the first quarter
of fiscal 1996.  The increase  as a percentage of net sales and  in
absolute dollars  is  attributable to  higher  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 increased as a percentage of net sales
in  the first quarter of fiscal  1997 compared to the first quarter
of fiscal 1996 but  decreased in absolute dollars primarily  due to
the  sale  of the  UnixWare and  personal  productivity application
product lines.  

General and  administrative expenses increased  as a percentage  of
net sales in the first quarter of fiscal 1997 compared to the first
quarter of  fiscal  1996,  while decreasing  slightly  in  absolute
dollars.

During the first  quarter of  fiscal 1996 the  Company incurred  18
million  of  tax  deductible restructuring  charges  for  redundant
facilities and  excess personnel as  the Company  prepared for  the
sale of its personal productivity applications product line.  

Overall, operating  expenses, excluding nonrecurring  charges, have
declined  less rapidly than revenues in the first quarter of fiscal
1997 compared to the  first quarter of fiscal 1996 due to sales and
marketing expenses associated with new product releases.  

                                            Q1                  Q1
                                          1997     Change     1996
------------------------------------------------------------------
Employees                                5,796        -19%   7,137
Annualized revenue per employee (000's)   $257          9%    $235
==================================================================

In  fiscal  1996, the  Company  reduced  its  employment  by  1,725
employees  as the  Company completed the sale of it s UnixWare  and
personal productivity applications product lines   and   terminated
or transitioned  former UnixWare and personal   productivity  group
employees to Corel, SCO, and other third parties.  

Other Income (Expense)
                                            Q1                  Q1
                                          1997     Change     1996
------------------------------------------------------------------
Other income (expense), net (millions)     $14          8%     $13
Percentage of net sales                      4%                  3%
==================================================================
</PAGE>

<PAGE>
The primary  component  of  other income  (expense)  is  investment
income,  which was $17 million in the  first quarter of fiscal 1997
compared to $15  million in the first quarter of  fiscal 1996.  The
increase is the result of higher realized capital  gains as well as
higher average yields on lower average cash balances.  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.  

Income Taxes
                                              Q1                 Q1
                                            1997    Change     1996
-------------------------------------------------------------------
Income taxes (millions)                      $24       -25%     $32
Percentage of net sales                        6%                 7%
Effective tax rate                            33%                34%
===================================================================

The Company's estimated tax rate for fiscal 1997 is 32.5%, compared
to 30.0% in fiscal 1996.  The effective tax rate for fiscal 1997 is
higher than  the effective tax rate for fiscal 1996 as a  result of
higher anticipated earnings in fiscal 1997.  

Net Income and Net Income Per Share
                                              Q1                 Q1
                                            1997    Change     1996
-------------------------------------------------------------------
Net income (millions)                        $51       -20%     $64
Percentage of net sales                       14%                 15%
Net income per share                        $.15       -12%    $.17
===================================================================

Liquidity and Capital Resources      
                                               Q1                Q4
                                             1997   Change     1996
-------------------------------------------------------------------
Cash and short-term investments (millions) $1,102        8%  $1,025
Percentage of total assets                     53%               50%
===================================================================

Cash and  short-term  investments  increased to  $1,102  million  at
January 31, 1997 from $1,025 million at October 26, 1996.  The major
reason  for this increase was the $113 million provided by operation
activities,  offset by the $28 million of cash used for expenditures
on property, plant and equipment, and  the $8 million used 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 31,  1997,  the Company's  principal  unused sources  of
liquidity consisted of cash and short-term investments and available
borrowing  capacity of  approximately $15  million under  its credit
facilities.   The Company's liquidity needs  are principally for the
Company's   financing  of   accounts  receivable,   capital  assets,
strategic investments  and flexibility in a  dynamic and competitive
operating environment.

During the first fiscal  quarter of 1997, 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.  Investments
will continue in product  development and in new and  existing areas
of technology.  Cash may also be used to acquire  technology through
purchases  and strategic  acquisitions.    Capital  expenditures  in
fiscal  1997 are  anticipated to  be approximately $80  million, but
could be reduced if the growth of the Company is less than presently
anticipated. 
</PAGE>

<PAGE>
Future Results

The Company s future results of operations involve a number of risks
and  uncertainties.    Among the  factors  that  could cause  actual
results  to  differ  materially  from  historical  results  are  the
following:  business conditions and the general economy; competitive
factors, such as rival operating systems, acceptance of new products
and price pressures; availability of third-party compatible products
of  reasonable  prices;  risk  of nonpayment  of  accounts  or notes
receivable;  risks  associated  with  foreign  operations;  risk  of
inventory  obsolescence  due to  shifts  in  technologies or  market
demand; timing of software product introductions; and litigation.

Novell  believes  that it  has  the  product offerings,  facilities,
personnel,  and competitive  and financial  resources  for continued
business success, but future revenues, costs, margins, product  mix,
and profits are all influenced by a number of  factors, as discussed
above. 

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 31, 1997.

-----------------------------
*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, 1997       /s/ Joseph A. Marengi
                            ---------------------
                            Joseph A. Marengi
                            President and Chief Operating Officer
                            Principal Executive Officer)



Date:  March 12, 1997       /s/ James R. Tolonen
                            --------------------
                            James R. Tolonen
                            Executive Vice President and
                            Chief Financial Officer
                            (Principal Financial and Accounting Officer)
</PAGE>