BAY NETWORKS AND MICROSOFT ANNOUNCE JOINT DEVELOPMENT AND MARKETING
RELATIONSHIP

-- Windows NT Server to Feature Bay Networks Routing Services and
Interfaces for Third Party Networking Solutions --

BILLERICA, Mass., July 18, 1995 -- Bay Networks, Inc. (Nasdaq: BNET) and
Microsoft Corporation (Nasdaq: MSFT) today announced a joint development,
support, and marketing alliance that will embed Bay Networks Routing
Services (BayRS) into Microsoft's Windows NT Server. Additionally, the two
companies are jointly developing a routing Application Programming
Interface (API) and a Routing Table Manager model in Windows NT that will
enable Bay Networks and third parties to provide a wide range of routing
protocols on Windows NT.

Microsoft plans to conduct an Open Process review of the routing API with
interested parties this fall.

The agreement provides for joint integration of Bay Networks OSPF software.
Bay Networks also will use the new routing API to provide quality of
service features for multimedia applications running on Windows NT.

In addition, Bay Networks and Microsoft will collaborate to develop
comprehensive network management solutions. As part of this effort, Bay
Networks Optivity network management application suite will enable users
to manage the Bay Networks Routing Services embedded in Windows NT Servers
from a single site located anywhere on the network. Microsoft will also
provide management tools integrated in Windows NT Server.

"The agreement between Bay Networks and Microsoft reflects the companies'
joint commitment to provide customers with an integrated, standards-based
networking platform for cost-effective remote office, remote professional
and Internet connectivity," said Gary Bowen, Bay Networks executive vice
president. "The integration of Bay Networks Routing Services brings
Windows NT Server into the Bay Networks Switched Internetworking Services
architecture (BaySIS), Bay's comprehensive architecture for helping
organizations design, implement, manage and augment flexible,
enterprise-wide networks."

"We're pleased to be working with Bay Networks to provide our mutual
customers with a choice of server integrated networking solutions that are
well supported and easy to manage," said Jim Allchin, senior vice
president of Microsoft's Business Systems Division. "Bay Networks shares
our commitment to providing open, standards-based network solutions.
Customers and the industry will benefit from these efforts."

Cooperative Testing, Support, Sales, and Marketing

Bay Networks and Microsoft will conduct ongoing product testing to ensure
ease-of-use and interoperability between Bay Networks Routing Services and
Windows NT Server, and between future versions of the companies' products.
Bay Networks also will support customers utilizing Windows NT Server as
part of larger Bay Networks-based installations. This cooperative support
agreement includes cross training and equipment exchange to ensure rapid
resolution of product issues. Additionally, Bay Networks and Microsoft
will offer joint sales and technical training to their respective sales
organizations and reseller partners.

Bay Networks, Inc. is a leading worldwide supplier of a full range of
highly available, multiprotocol routers, intelligent hubs, high-speed
switches, and sophisticated network management products for organizations
building enterprise-wide information internetworks. The company was
established in October 1994 through the merger of SynOptics Communications
and Wellfleet Communications, and combined revenues in excess of $1
billion for its most recent fiscal year. With more than 1,000 resellers
and over 1,200 direct sales and service personnel worldwide, Bay Networks
markets and supports its comprehensive product suite worldwide through 110
offices, providing global 7x24 customer support.

Founded in 1975, Microsoft is the worldwide leader in software for personal
computers. The company offers a wide range of products and services for
business and personal use, each designed with the mission of making it
easier and more enjoyable for people to take advantage of the full power
of personal computing every day.
 
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