<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 April 30, 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)            Identification 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  May  31,  1997  there  were  349,084,897  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>                                               
Dollars in thousands,                         Apr. 30,      Oct. 26,
except per share data                             1997          1996
--------------------------------------------------------------------

ASSETS

Current assets
 Cash and short-term investments           $ 1,044,106   $ 1,024,755
 Receivables, less allowances  
 ($48,278 - April; $60,940 - October)          332,507       452,327
 Inventories                                    18,400        16,837
 Prepaid expenses                               70,914        59,009
 Deferred income taxes                          72,223        37,831
--------------------------------------------------------------------

Total current assets                         1,538,150     1,590,759

Property, plant and equipment, net             399,598       394,684
Other assets                                    57,152        64,023
--------------------------------------------------------------------

Total assets                               $ 1,994,900   $ 2,049,466
====================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 
 Accounts payable                          $    71,570   $    96,933
 Accrued compensation                           41,554        54,731
 Accrued marketing liabilities                  45,045        48,402
 Other accrued liabilities                      84,750       118,133
 Income taxes payable                           21,872            --
 Deferred revenue                               52,117        46,573
--------------------------------------------------------------------

Total current liabilities                      316,908       364,772

Minority interests                              16,171        17,035
Put warrants                                    19,750        52,150
Shareholders' equity
 Common stock, par value $.10 a share
     Authorized - 600,000,000 shares
     Issued - 348,777,827 shares-April
              346,059,050 shares-October        34,878        34,606
 Additional paid-in capital                    347,694        309,831
 Retained earnings                           1,302,835      1,266,657
 Unearned stock compensation                    (8,599)        (4,141)
 Cumulative translation adjustment              (1,303)         1,183
 Unrealized gain (loss) on investments         (33,434)         7,373
---------------------------------------------------------------------
 
Total shareholders' equity                   1,642,071      1,615,509
---------------------------------------------------------------------

Total liabilities and shareholders' equity $ 1,994,900   $  2,049,466
=====================================================================

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

<PAGE>
<TABLE>

                            NOVELL, INC.
     CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

<S>                           <C>        <C>       <C>        <C>
                            Fiscal Quarter Ended     Six Months Ended
                            --------------------    ------------------

Amounts in thousands,         Apr. 30,   Apr. 27,   Apr. 30,  Apr. 27,
except per share data             1997       1996       1997      1996
----------------------------------------------------------------------

Net sales                     $273,107   $188,180   $647,954  $626,099
Cost of sales                   77,175     68,614    153,146   164,625
----------------------------------------------------------------------

Gross profit                   195,932    119,566    494,808   461,474

Operating expenses  
  Sales and marketing          116,068    127,292    243,958   250,757
  Product development           68,442     69,723    140,197   148,356
  General and administrative    39,517     34,731     77,248    73,269
  Restructuring charges             --         --         --    18,442
----------------------------------------------------------------------

Total operating expenses       224,027    231,746    461,403   490,824

Income (loss) from operations  (28,095)  (112,180)    33,405   (29,350)

Other income (expense)
  Investment income              9,921     11,257     26,535    26,157
  Gain on sale of assets            --     19,815         --    19,815
  Other, net                    (3,506)    (2,138)    (6,343)   (4,288)
----------------------------------------------------------------------

Other income, net                6,415     28,934     20,192    41,684
----------------------------------------------------------------------

Income (loss) before taxes     (21,680)   (83,246)    53,597    12,334
Income taxes                    (7,046)   (27,887)    17,419     4,132
Net income (loss)            $ (14,634) $ (55,359)  $ 36,178  $  8,202
======================================================================

Weighted average 
shares outstanding             347,904    362,442    347,499   367,013
======================================================================

Net income (loss) per share   $  (0.04)  $ ( 0.15)  $   0.10  $   0.02
======================================================================

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

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


<S>                                                     <C>           <C>    
                                                           Six Months Ended
                                                        ----------------------
                                                         Apr. 30,     Apr. 27,
Amounts in thousands                                         1997         1996
------------------------------------------------------------------------------

Cash flows from operating activities

 Net income                                            $   36,178   $    8,202

Adjustments to reconcile net income to net cash 
provided (used) by operating activities
   Depreciation and amortization                           46,266       51,190
   Gain on sale of assets                                      --      (19,815)
   Stock plans  income tax benefits                         2,356        4,863
   Decrease in receivables                                119,820      113,315
   (Increase) decrease in inventories                      (1,563)       6,083
   (Increase) decrease in prepaid expenses                (11,905)      18,792
   (Increase) decrease in deferred income taxes           (34,532)      17,167
   (Decrease) in current liabilities, net                 (47,864)     (99,743)
------------------------------------------------------------------------------

Net cash provided from operating activities               108,756      100,054
------------------------------------------------------------------------------

Cash flows from financing activities
   Issuance of common stock, net                            7,673       23,630
   Repurchases of common stock                                 --     (316,559)
   Sale of put warrants                                     2,300       10,055
   Settlement of put warrants                             (14,494)          --
------------------------------------------------------------------------------

Net cash (used) from financing activities                  (4,521)    (282,874)
------------------------------------------------------------------------------

Cash flows from investing activities
  Expenditures for property, plant and equipment          (47,738)     (28,997)
  Purchases of short-term investments                  (1,271,326)  (1,895,848)  
  Maturities of short-term investments                    951,279    1,605,453   
  Sales of short-term investments                         303,908      329,026   
  Proceeds from sale of assets                                 --       10,750
  Other                                                     3,661       (2,542)
------------------------------------------------------------------------------

Net cash (used) provided by investing activities          (60,216)      17,842
------------------------------------------------------------------------------

Total increase (decrease) in cash and cash equivalents $   44,019    $(164,978)  
Cash and cash equivalents - beginning of period           145,521      312,164   
------------------------------------------------------------------------------
 
Cash and cash equivalents - end of period                 189,540      147,186   
Short-term investments - end of period                    854,566    1,033,829
------------------------------------------------------------------------------

Cash and short-term investments - end of period        $1,044,106   $1,181,015
==============================================================================

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.    The   Company  believes  that
     implementing this change did not have a material impact  on its
     financial position, results of operations, or cash flows.   

B. Significant Events

     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.  The change in the Company s  traditional distribution
     stocking  policy was to  respond to changing market conditions.
     Over  the past  two years,  direct customer  and OEM  licensing
     programs  have grown from less than 5%  of revenue to more than
     40%  of revenue.   Such licensing revenues  do not flow through
     the  Company s historical distribution  channel.   This change,
     along  with the evolution that is taking place in the method of
     software    distribution   to    permit   eventual   electronic
     distribution  of  products  changes the  Company s  reliance on
     boxed  product  flowing through  a  distribution  channel.   In
     order  to  deal  with  this changing  environment  the  Company
     responded  by not  shipping product to  distributors during the
     second quarter of fiscal 1996 which had the effect  of reducing
     inventories  within  the  distribution channel.    The  Company
     estimates that it reduced product inventories in  the worldwide
     distribution  channel during the  second fiscal quarter of 1996
     by  approximately $225  million.  Additionally,  net returns of
     approximately  $20  million  were  accepted  during the  second
     quarter related to this policy change. 

     Due  to disappointing  sales of boxed  products by distributors
     and  lower  licensed  revenue  of  certain  older  products  to
     original   equipment   manufacturers   (OEM s)   as   well   as
     competitive pressures in the small network market,  Novell will
     take  corrective measures  to realign its  resources and better
     manage and control its  business.  The Company plans to  reduce
     its workforce by  approximately 18%  or 1,000 employees in  the
     third  quarter  of  fiscal  1997.    In  addition,  the Company
     intends to  reduce  product  inventories  in  its  distribution
     channel  in the  third quarter of fiscal  1997.  Current levels
     of  product  inventories  are  no  longer  appropriate  as  the
     Company's   business continues  to   experience   competitive
     pressures and to shift  from a high reliance on boxed  software
     distribution to  a changing  mix of boxed  products and  multi-
     product  licenses.   The Company will  implement this reduction
     in  channel  inventory held  by  distributors  by not  shipping
     additional   products  to  distributors  in  its  third  fiscal
     quarter  of 1997,  thus decreasing  revenue by  a corresponding
     amount.     In  the  second  quarter   of  fiscal  1997,   this
     distribution channel  accounted for approximately $100  million
     of  revenue.    The  Company  will  assist  resellers  to  meet
     customer needs by appropriately matching existing inventory  in
     the channel to specific product demand around the globe.

     The decision to withhold shipments to distributors  is expected
     to result in  an operating loss in the  third fiscal quarter of
     1997.   The  workforce reduction is  estimated to  yield a one-
     time  restructuring  charge ranging  from  $25  million to  $35
     million  in  the  third  fiscal quarter  of  1997,  principally
     comprised of severance and excess facilities costs.
</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.     All  equity   securities  included  as  short  term
     investments are investments the Company has  made in technology
     companies or equity securities received by  the Company through
     its dispositions  of certain product lines  to Corel and  Santa
     Cruz  Operation, Inc.  in fiscal  1996.   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)         Apr. 30, 1997        Gains       Losses     Apr. 30, 1997
----------------------------------------------------------------------------------------
Cash and cash equivalents                                      
 Cash                             $  107,671     $     --    $      --        $  107,671
 Repurchase agreements                 2,081           --           --             2,081
 Taxable money market fund            39,383           --           --            39,383
 Municipal securities                 40,405           --           --            40,405
----------------------------------------------------------------------------------------
Cash and cash equivalents         $  189,540     $     --    $      --        $  189,540
----------------------------------------------------------------------------------------

Short-term investments
 Municipal securities             $  462,131     $    567    $    (989)       $  461,709
 Money market mutual funds            82,036           --          --             82,026
 Money market preferreds             177,901           --          --            177,901
 Mutual funds                         14,436            1         (23)            14,414
 Equity securities                   172,507       14,594     (68,585)           118,516
----------------------------------------------------------------------------------------
Short-term investments            $  909,001     $ 15,162   $ (69,597)        $  854,566
----------------------------------------------------------------------------------------
Cash and short-term investments   $1,098,541     $ 15,162   $ (69,597)        $1,044,106
----------------------------------------------------------------------------------------
</TABLE>
</PAGE>

<PAGE>
<TABLE>
<S>                            <C>             <C>           <C>           <C>
                                                    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 six  months of  fiscal 1997  the Company  had
     realized  gains  of  $5  million  on  the  sale  of  securities
     compared  to realized  gains  of $4  million  in the  first six
     months of fiscal 1996.

D. Income Taxes

     The Company's estimated  effective tax rate  for the  first six
     months of fiscal 1997 was 32.5% compared to 33.5%  in the first
     six months of fiscal 1996.   The Company paid cash amounts  for
     income taxes of  $7 million and  $12 million, in the  first six
     months 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  April  30,  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
     April  30, 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 six  months 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.  In the  first six months  of fiscal 1997, the  Company
     settled put  warrant obligations on  4 million  shares for cash
     of $14 million.   During the first six  months of 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 the  first six months
     of fiscal  1996, put  warrant obligations on  2 million  shares
     expired with no cash settlement required.  

     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
     Company  expects  to settle  the  put warrant  obligations with
     cash and  thereby eliminate the  liability.  As  of the end  of
     the second quarter  of fiscal 1997,  the cash  settlement would
     be approximately  $5 million.  The  proceeds from the  issuance
     of  the put  options were accounted for  as additional paid-in-
     capital.
</TABLE>
</PAGE>

<PAGE>
G. International Sales 

     The Company markets internationally both directly to end users
     and through  distributors who  sell to  dealers and end  users.
     For the six months  ended April   30, 1997 and April  27, 1996,
     sales  to  international  customers  were   approximately  $302
     million  and $322  million,  respectively.   In the  first  six
     months   of  fiscal   1997  and  fiscal  1996,   57%  and  54%,
     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 14%  of revenue  in
     the first  six months of 1997,  no customer  accounted for more
     than 10% of revenue in any period.

H. Net Income (Loss) 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>
<TABLE>

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.  

Results of Operations

<S>                   <C>    <C>       <C>      <C>   <C>      <C>
Net Sales
                        Q2             Q2        YTD            YTD
                      1997   Change    1996     1997  Change   1996
-------------------------------------------------------------------

Net sales (millions)  $273       45%   $188     $648       4%  $626
===================================================================

Novell s  product lines can  be categorized  into three  areas, all
within  the   software  industry.     They  are   server  operating
environments;  network  services;  and UNIX  royalties,  education,
service  and other.  While  revenue increased from  both the second
quarter of 1996  to the second  quarter of 1997  and the first  six
months of fiscal 1996 to the  first six months of 1997, analysis of
the individual product  categories characterizes  the changes  that
have occurred.  Additionally,  none of the $188 million  of revenue
in  the  second  quarter  of  fiscal  1996  came  from  the  normal
distribution channel  which  has provided  50%  to 60%  of  revenue
historically.  The decision to not ship to the distribution channel
in the second  quarter of  fiscal 1996 accounts  for a  significant
portion of the computed growth between the second quarter of fiscal
1996 and the second quarter of fiscal 1997.  

Server operating  environments revenues  increased by 164%  or $104
million  in the  second  quarter of  1997  compared to  the  second
quarter of  1996.  Growth in the IntranetWare product family of $96
million or 267% growth from the second quarter of 1996 was somewhat
augmented by  an increase  in the  NetWare 3 product  family of  $7
million or a 26% increase from the second quarter of 1996.

Network  services revenues increased by  28% or $14  million in the
second quarter of 1997 compared to the second quarter of 1996.  The
increase  is mainly the  result of increases  in network management
products of $8  million or 140% and  an increase in  GroupWise, the
Company s electronic messaging workgroup application, of $5 million
or 25%.

UNIX  royalties revenue decreased 49%  or $9 million  in the second
quarter of 1997 compared to the second quarter of 1996. 

Education, service and other revenues decreased by $3 million or 7%
in the  second quarter of  1997 compared to  the second quarter  of
1996.   The decrease  was a result  of lower revenues  in training,
with an increase in service related revenue.  

International sales represented 47% of total sales in the first six
months  of 1997 compared  to 51% in  the first six  months of 1996.
This change  is a  result of  a 13% increase  in domestic  revenues
compared  to a 5% decrease  in international revenues  in the first
six  months of  fiscal 1997  compared to  the first  six months  of
fiscal 1996.
</TABLE>
</PAGE>

<PAGE>
<TABLE>
<S>                                    <C>     <C>       <C>       <C>    <C>      <C>
Gross Profit

                                         Q2                 Q2      YTD             YTD
                                       1997    Change     1996     1997   Change   1996
---------------------------------------------------------------------------------------
Gross profit (millions)                $196        63%    $120     $495       7%   $461
Percentage of net sales                  72%                64%      76%             74%
=======================================================================================

The gross  margin percentage  increased  in the  second quarter  of
fiscal 1997  compared to the second  quarter of fiscal 1996  and in
the first  six  months of  fiscal 1997  compared to  the first  six
months of fiscal  1996 due to  the fixed portion  of cost of  sales
being  a  higher percentage  of the  lower  revenues in  the second
quarter  of  fiscal 1996  due  to  the change  in  the distribution
stocking  policy as  well  as 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
                                         Q2                 Q2      YTD             YTD
                                       1997    Change     1996     1997   Change   1996
---------------------------------------------------------------------------------------
Sales and marketing (millions)         $116        -9%    $127     $244      -3%   $251
Percentage of net sales                  42%                68%      38%             40%
Product development (millions)         $ 68        -3%    $ 70     $140      -5%   $148
Percentage of net sales                  25%                37%      22%             24%
General and administrative (millions)  $ 40        14%    $ 35     $ 77       5%    $73  
Percentage of net sales                  15%                18%      12%             12%
Restructuring charges (millions)         --        --       --       --      --     $18
Percentage of net sales                  --        --       --       --               3%
Total operating expenses (millions)    $224        -3%    $232     $461      -6%   $491
Percentage of net sales                  82%               123%      71%             78%
=======================================================================================

Sales and marketing expenses decreased as a percentage of net sales
in both  the second quarter  of fiscal 1997 compared  to the second
quarter of fiscal 1996 as well as in the first six months of fiscal
1997 compared to the first six months of fiscal 1996.  The decrease
as  a  percentage  of   net  sales  and  in  absolute   dollars  is
attributable  to lower  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 decreased as a percentage of net sales
in the second quarter of fiscal 1997 compared to the second quarter
of fiscal 1996 as  well as in the first  six months of fiscal  1997
compared to the first  six months of  fiscal 1996 but decreased  in
absolute dollars  primarily due  to the  sale of  the UnixWare  and
personal productivity  application product lines  in the  first six
months of fiscal 1996.

General and  administrative expenses decreased  as a  percentage of
net  sales in  the second  quarter of fiscal  1997 compared  to the
second  quarter  of  fiscal  1996,  while  increasing  in  absolute
dollars.   General and  administrative expenses remained  flat as a
percentage of net sales while increasing in absolute dollars in the
first six months of fiscal 1997 compared to the first six months of
fiscal 1996.  

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 while revenues have increased in  both the second  quarter
of fiscal 1997  compared to the  second quarter of  fiscal 1996  as
well as  in the first  six months  of fiscal  1997 compared to  the
first six months of fiscal 1996.  
  
                                            YTD                 YTD
                                           1997    Change      1996
-------------------------------------------------------------------
Employees                                 5,746        -2%    5,860
Annualized revenue per employee (000's)    $223        21%     $184
===================================================================

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.  
</TABLE>
</PAGE>

<PAGE>
<TABLE>
<S>                                      <C>    <C>       <C>     <C>      <C>      <C>
Other Income (Expense)
                                           Q2               Q2      YTD              YTD
                                         1997   Change    1996     1997    Change   1996
---------------------------------------------------------------------------------------- 
Other income (expense), net (millions)     $6      -79%    $29      $20       -52%   $42
Percentage of net sales                     2%              15%       3%               7%
========================================================================================

The  primary  component  of other  income  (expense)  is investment
income, which was $10  million in the second quarter of fiscal 1997
compared to  $11 million in the  second quarter of fiscal  1996 and
was $27 million  in the first six months of fiscal 1997 compared to
$26 million  in the first six months of  fiscal 1996.  The relative
flatness  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.  

Also included in  other income (expenses),  the Company recorded  a
gain  of  $20 million  on  the  sale of  its  personal productivity
applications product line in the second quarter of fiscal 1996.

Income Taxes
                                           Q2               Q2      YTD              YTD
                                         1997   Change    1996     1997   Change    1996
----------------------------------------------------------------------------------------
Income taxes (millions)                   $(7)     -75%   $(28)     $17      325%     $4   
Percentage of net sales                    -3%             -15%       3%               1%
Effective tax rate                         33%              34%      33%              34%
========================================================================================

Net Income (Loss) and Net Income (Loss) Per Share
                                           Q2               Q2      YTD               YTD   
                                         1997   Change    1996     1997   Change     1996   
-----------------------------------------------------------------------------------------
Net income (loss) (millions)            $ (15)     -73%  $ (55)    $ 36      -20%      $8   
Percentage of net sales                    -5%             -29%       6%                1%
Net income (loss) per share             $(.04)           $(.15)    $.10      -12%    $.02   
=========================================================================================

Liquidity and Capital Resources      
                                                    Q2                                 Q4   
                                                  1997             Change            1996
-----------------------------------------------------------------------------------------
Cash and short-term investments (millions)      $1,044                  2%         $1,025
Percentage of total assets                          52%                                50%
=========================================================================================

Cash  and  short-term investments  increased  to $1,044  million at
April 30, 1997 from $1,025 million at October 26, 1996.   The major
reason for this increase was the $109 million provided by operating
activities, offset by the $48 million of cash used for expenditures
on property, plant  and equipment, the  $14 million used to  settle
put  warrants,  and   the  $28  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 April
30,  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 six months 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 $60
million, down from  the original  estimate of $80  million, as  the
Company  experienced  less  than previously  estimated  growth, and
could be further reduced if the growth  of the Company is less than
presently anticipated. 
</TABLE>
</PAGE>

<PAGE>
Forward Looking Information

Due to  disappointing sales of  boxed products by  distributors and
lower  licensed  revenue  of  certain older  products  to  original
equipment manufacturers (OEM s) as well as competitive pressures in
the small network  market, Novell will take corrective  measures to
realign  its resources and better  manage and control its business.
In the second  quarter of fiscal 1997,  these distribution channels
accounted for approximately $140 million  of revenue.  The Company 
intends  to reduce product inventories  in its distribution
channel  in the  third quarter of  fiscal 1997.   Current levels of
product  inventories are  no  longer appropriate  as the  Company's
business continues to experience competitive pressures and to shift
from a high reliance  on boxed software distribution to  a changing
mix of boxed products and multi-product licenses.  The Company will
implement this reduction in  channel inventory held by distributors
by not shipping  additional products to  distributors in its  third
fiscal quarter  of 1997, thus decreasing revenue by a corresponding
amount. The Company will assist resellers to meet customer needs by
appropriately  matching  existing  inventory   in  the  channel  to
specific product demand  around the globe. In addition, the Company
plans  to  reduce its   workforce by  approximately  18%  or  1,000
employees in the third quarter fo fiscal 1997.

The  decision to withhold shipments  to distributors is expected to
result in  an operating loss in  the third quarter  of fiscal  1997.
The  workforce   reduction  is   estimated  to  yield   a  one-time
restructuring charge ranging from $25 million to $35 million in the
third  quarter of fiscal  1997, principally comprised  of severance
and excess facilities costs.

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 at  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.
</PAGE>

<PAGE>
<TABLE>
Item 4. Submission of Matters to a Vote of Security Holders

The Company held its  Annual Meeting of Shareholders on May 2, 1997
for the following purposes:

1.    To elect seven directors:

2.    To approve  and ratify  the adoption of an  amendment to  the
      Novell, Inc.  1989 Employee  Stock Purchase  Plan to increase
      the shares reserved for issuance thereunder from 8,000,000 to
      12,000,000.

3.    To ratify the selection of Ernst & Young, LLP as  independent
      auditors for Novell, Inc.

The following tables  set forth  the outcome of  the matters  voted
upon at the meeting  and the number of votes cast  for,  against or
withheld.

<S>                                 <C>                                    <C>      

                                          Votes                                  Votes
Proposal 1                                  For                               Withheld
--------------------------------------------------------------------------------------
Election of Directors
       Eric E. Schmidt              283,827,522                              8,556,903
       Elaine R. Bond               282,924,981                              9,459,444
       Hans-Werner Hector           283,309,269                              9,084,739
       Jack L. Messman              282,968,469                              9,415,956
       Larry W. Sonsini             281,360,993                             11,023,432
       Ian R. Wilson                282,800,799                              9,583,626
       John A. Young                283,299,686                              9,084,739
--------------------------------------------------------------------------------------


                                          Votes         Votes                   Votes
Proposal 2                                  For       Against      Withheld/Abstained
-------------------------------------------------------------------------------------
Approval and ratification of the 
adoption of an amendment to the 
Novell, Inc. 1989 Employee 
Stock Purchase Plan                 271,753,215    19,195,071               1,436,139
-------------------------------------------------------------------------------------


                                         Votes         Votes                    Votes 
Proposal 3                                 For       Against       Withheld/Abstained
-------------------------------------------------------------------------------------
Ratify the selection of
Ernst & Young, LLP
as Independent Auditors            287,912,713     3,543,404                  928,308
-------------------------------------------------------------------------------------

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 April 30, 1997.


-------------------------------
*Filed herewith
</TABLE>
</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: June 13, 1997                  /s/ Dr. Eric E. Schmidt
                                             -----------------------------
                                             Dr. Eric E. Schmidt
                                             Chairman of the Board and
                                             Chief Executive Officer
                                             (Principal Executive Officer)



        Date: June 13, 1997                  /s/ James R. Tolonen
                                             -----------------------------
                                             James R. Tolonen
                                             Executive Vice President and 
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)
</PAGE>