Red Hat Announces Red Hat Linux 7, Latest Version of Leading Open Source Operating System Offers Enhanced Security, Ease of Use and Management

RESEARCH TRIANGLE PARK, N.C.—September 25, 2000—Red Hat®, Inc. (NASDAQ: RHAT), the leader in developing, deploying and managing open source Internet infrastructure solutions, today announced the September 26 availability of Red Hat Linux 7, the latest version of the world's most popular open source server operating environment. Red Hat Linux 7 provides enhanced security, new ease-of-use features, optimized software for higher-end Intel chips and increased 3D support, along with dozens of new enterprise-ready applications, extending its lead as the most powerful and widely used open source server environment in the world. Through the new Red Hat Network -- available now to all Red Hat 7 users on a free trial basis -- Red Hat is pioneering a new way to deliver open source products, service, support and information on-line in real-time.

"Red Hat Linux is the most popular and trusted open source environment in the world, and with the enhancements to Red Hat Linux 7 it becomes an even more compelling choice for enterprises to use as the foundation of their internet infrastructures," said Matthew Szulik, president and CEO of Red Hat, Inc. "Increased security, ease of use and manageability make Red Hat Linux 7 a full-featured solution for enterprise IT departments, workstation users and developers. It's appropriate that as the company responsible for so much of the internet infrastructure, Red Hat should also be the first to offer a complete array of on-line service and support through our innovative Red Hat Network. The Internet is the future of development, deployment and management services for software technology, and Red Hat is there today."

"As developers continue to port applications to Linux, they require new services that will enable them to take advantage of the breadth of open source development through initiatives from companies like Red Hat Linux powered by Intel(r) Architecture," said Victor Krutul, Manager Operating System Programs, Intel. "Using Red Hat Network, developers have on-line, real-time access to open source products, service, support as well as Red Hat Linux 7 upgrades delivered to them automatically to take advantage of the new capabilities and features."

Red Hat Linux 7 open source operating system
Red Hat Linux 7 is the latest major edition of the award-winning open source operating system. It provides the open source flexibility, scalability and manageability necessary to bring the most ambitious Linux initiative under the control of an integrated Internet computing platform. Important new capabilities provided by Red Hat Linux 7 include:

• For Enterprise IT Departments - integrated security with OpenSSL for secure communication via the web; graphical configuration tools; MySQL database; and pre-set for the arrival of the 2.4 kernel.
• For Workstation users - more customizable desktop environment; more software to choose from including digital photography viewing and diagram drawing programs; increased security for default installations to protect users who use cable modems or ADSL to reach the Internet; and better 3D graphics support.
• For Developers - enhanced internationalization sub-system, more complete C++ support with new compiler; updated development suite; and a preview of many new development tools such as the new GNU compiler for the Java programming language.

Red Hat Linux 7 is available in three versions; each includes the Red Hat Linux operating system, productivity applications (some trial versions and some full), StarOffice Office Suite (Deluxe and Professional only) and detailed installation documentation. The versions are:

• Standard:
  60 days web support, 60-day free Red Hat Network trial
• Deluxe:
  90 days web support, 90-day free Red Hat Network trial, 30 days phone support
• Professional:
  90 days web support, 180 days free Red Hat Network trial, 30 days phone support, 30 days Apache support

Red Hat's comprehensive services and support organization round out an enterprise solution that delivers the tools and performance necessary to translate the promise of open source into high-value, scalable internet infrastructure implementations.

Red Hat Linux 7 (in USD) and availability
Red Hat Linux 7 Standard edition: $29.95; Red Hat Linux 7 Deluxe edition: $79.95; and Red Hat Linux 7 Professional edition: $179.95. All versions are available from redhat.com and through retail outlets worldwide. September 26 availability for ftp download.

Red Hat Network is available to all Red Hat Linux 7 users from September 26 through December 31 on a free trial basis, with functionality to be added for Red Hat Linux 6.2 users soon. For more information, see www.redhat.com/network.

Open source momentum
International Data Corp. (IDC) research states that paid Linux shipments grew faster than any other server operating system over the past two years, and their preliminary figures for 1999 show Linux shipments hold 24.6 percent of the server operating system market, up from 15.8 in 1998. IDC also states that Red Hat holds 50.2 percent of Linux vendor market share and that Red Hat Linux is by far the most popular distribution, preferred by 68.7 percent of U.S. Linux users.

Research firm Netcraft, Inc. (www.netcraft.com), states that as of May 2000, 30 percent of all public Web sites run on Linux-based operating systems, making Linux the most popular choice for deploying public Web sites. IDC research shows 40 percent of all spending on Linux servers is for Internet related applications, firmly entrenching Linux servers in the Internet infrastructure.

Finally, IDC predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs.

Red Hat's numerous alliances with industry leaders and the demand for Linux-based applications has created open source support from many of the industry's leading software and hardware manufacturers, including Dell, Compaq, Computer Associates, Hewlett-Packard, IBM, Intel, Netscape, Novell, Oracle and SAP.

About Red Hat, Inc.
Founded in 1994, Red Hat (Nasdaq:RHAT), is the leader in development, deployment and management of Linux and open source solutions for Internet infrastructure ranging from small embedded devices to high availability clusters and secure web servers. In addition to the award-winning Red Hat Linux server operating system, Red Hat is the principle provider of GNU-based developer tools and support solutions for a wide variety of embedded processors. Red Hat provides run-time solutions, developer tools, Linux kernel expertise and offers support and engineering services to organizations in all embedded and Linux markets.

Red Hat applies its technological leadership to create open source solutions for all points on the Internet and in pervasive computing environments, offers services backed by the best understanding of open source and the most comprehensive resources, and delivers the brand of a widely trusted open source leader and corporate partner. Red Hat offers users one single, trusted point of contact and a common platform for developing, deploying and managing open source across the Internet and devices that connect to the Internet.

Red Hat is based in Research Triangle Park, N.C. and has offices worldwide. Please visit Red Hat on the Web at http://www.redhat.com/index.html.

Forward-looking statements
Forward-looking statements in this press release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release that are not strictly historical statements, including, without limitation, management's plans and objectives for future operations and management's assessment of market factors, constitute forward-looking statements which involve risks and uncertainties. These risks and uncertainties include, without limitation, product plans and performance, the ability to continue to develop the Linux kernel and other software, reliance upon strategic relationships, Red Hat's dependence upon an open source business model, reliance upon independent third-party Linux developers, management of growth, expansion of Red Hat's business focus and operations, the possibility of undetected software errors, the enforceability of the GNU General Public License and other licenses under which Red Hat's products are developed and licensed, the scarcity of Linux-based applications, the risks of economic downturns generally, and in Red Hat's industry specifically, the risks associated with competition and competitive pricing pressures, the viability of the Internet, and other risks detailed in Red Hat's filings with the Securities and Exchange Commission, copies of which may be accessed through http://www.sec.gov/.

LINUX is a trademark of Linus Torvalds. RED HAT is a registered trademark of Red Hat, Inc. All other names and trademarks are the property of their respective owners.