Red Hat Named Market Leader in Worldwide Linux Shipments for Second Consecutive Year

Research Triangle Park

United States, August 23, 2000

Red Hat, Inc. (Nasdaq:RHAT), the leader in open source Internet infrastructure solutions, today announced that International Data Corporation (IDC) has named it the market leader for the second consecutive year in Linux shipments worldwide.

In its "Linux Market Trends: Vendor Market Share and Growth Prospects" bulletin, IDC points out that Red Hat is the undisputed Linux market leader with 52.4 percent of all worldwide Linux server software shipments ---more than three times the market share of its nearest competitor. Additional IDC research in "Server Operating Environments Market Forecast and Analysis, 2000-2004," states that Linux remains the fastest-growing server operating system, with the worldwide installed base of Linux growing at a 35 percent compound annual growth rate (CAGR) between 1999-2004.

"The IDC and other recent surveys provide powerful evidence of Red Hat's brand and the increasing success of our strategy to provide the full-range of software and services for the open source Internet infrastructure, spanning powerful Web servers to post-PC devices," said Matthew Szulik, president and CEO of Red Hat, Inc.

"Red Hat has been the leading supplier of Linux software since IDC started tracking this software market in 1994." said Dan Kusnetzky, VP of IDC's system software research, "This company has successfully created a brand which is recognized worldwide."

The IDC research echoes another recent survey illustrating Red Hat's leadership. Netcraft Inc.'s (www.netcraft.com) May 2000 Web Server Survey located almost 850,000 Web sites worldwide that run Linux and provide a personalized server header. Out of these sites, 72 percent run on Red Hat Linux (compared with just 10 percent for the second largest distribution). In June, Netcraft found that 30 percent of all public Web sites run on Linux-based operating systems, making Linux the most popular choice for deploying public Web sites.

About Red Hat, Inc.

Red Hat, the world's leading open source and Linux provider, is headquartered in Raleigh, NC with satellite offices spanning the globe. Red Hat is leading Linux and open source solutions into the mainstream by making high quality, low cost technology accessible. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training and consulting services to its customers worldwide and through top-tier partnerships. Red Hat's open source strategy offers customers a long term plan for building infrastructures that are based on and leverage open source technologies with focus on security and ease of management. Learn more: http://www.redhat.com

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, reliance upon strategic relationships, management of growth, the possibility of undetected software errors, 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 the SEC's Web site at http://www.sec.gov.

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