Novell to merge with Digital Research: preventive measures to maintain lead in network operating systems. (Novell's purchase of DRI for 1.5 million Novell shares may be response to Microsoft's announcement of a distributed operating system)

Novell and Digital Research (DRI) recently signed a "definite agreement" to merge the two companies, making DRI a wholly owned Novell subsidiary. Existing shares of DRI's common stock will be exchanged for 1.5 million newly issued shares of Novell common stock. Novell did not indicate whether it has any plans to consolidate DRI's operations with its own.

Digital Research is best know for the CP/M operating system, which dominated the Z80-based 8-bit computing world in the late 1970s, and for GEM, the graphic environment in which the original version of Ventura Publisher ran. DRI fell into gradual decline, however, when it refused IBM the right to private label CP/M-86 for its new 8088-based PC, which forced Big Blue to turn to Microsoft instead.

Sadly, DRI's marketing errors have obscured its technological prowess. …