Red Hat and North Carolina State University Partner to Establish First Open Source-Based University

RESEARCH TRIANGLE PARK, N.C.—October 18, 2000—Red Hat®,Inc. (NASDAQ:RHAT), a leading provider of open source solutions for developing, deploying and managing Internet infrastructure, today announced an initiative with North Carolina State University, to standardize their College of Engineering academic computing environment (Eos) on open source technologies. The initial deployment will feature Red Hat Linux on Dell Optiplex hardware and will expose thousands of College of Engineering students to open source software.

This initiative is a continuation of Red Hat's University Program, announced in June, to bring the benefits of open source software to educational facilities worldwide, and is a combination of Red Hat's open source leadership, comprehensive resources and active university community outreach, and NC State's reputation as a leading and progressive engineering university. The partnership with NC State's engineering department enables the swift transport of Eos to an open source Internet infrastructure and expand teaching and development resources, while giving engineering students ready access to state of the art computing and development platforms.

"Forrester Research has projected that open source software will dominate the industry by 2004, just when today's freshmen are graduating. It is critical for us to help prepare them to be leaders in world dominated by open source software," said Thomas K. Miller III, Ph.D. Interim Vice Provost for Distance Education and Learning Technologies North Carolina State University. "The NC State College of Engineering has enjoyed close ties to Red Hat from the beginning, particularly through two of our alumni, Erik Troan and Donnie Barnes, who joined the company shortly after it was formed. Our collaborations with Red Hat not only provide our students with a powerful and affordable platform that ties seamlessly into our campus network, but also a platform with which they can experiment, learn, and innovate in the world of open source."

"I'm excited to see them standardizing their academic computing environment on open source technologies," said Erik Troan, VP, Product Engineering for Red Hat. "The entire software industry is changing and embracing the open source development model. The Program helps these students move to the forefront of today's Internet computing technologies."

About Project Eos
North Carolina State University began to roll out Project Eos, named after the Greek goddess of dawn, in 1990 as the core of their academic computing environment. Eos is a combination of Project Athena from MIT and Project Andrew from Carnegie-Mellon, that creates a large scale distributed computing environment where engineering students can have instant access to their files and applications from any node. In 1990, the program used only expensive UNIX workstations because of the amount horse power required to run sophisticated engineering applications and operate in a complex networked environment. In 1994, NC State engineering student Donnie Barnes decided to take on the task of porting all of the key systems components of the Eos environment to Linux as his senior project. Now, on the 10th anniversary of Eos, the College of Engineering has deployed Eos/Linx (now officially known as Realm Kit for Red Hat Linux) as a fully integrated core platform (along with Solaris and Windows NT) in its students computing laboratories.

About the Red Hat University Program
Announced in June 2000, Red Hat's University Program made an initial donation of over $350,000 in open source software and tools, including GNU Pro Dev Kits and Source-Navigator IDE to universities including California Institute of Technology, Columbia University, Georgetown University, University of Alberta, University of California at San Diego, University of Chicago, University of North Carolina, University of Washington; and the University of Toronto and the University of Waterloo, both in Canada. Whether in an administrative, educational, or research-oriented capacity, Red Hat seeks to provide various open source software and products to educational institutions interested in utilizing open source technologies. Universities may apply via email for the opportunity to participate in the Red Hat University Program at http://www.redhat.com/apps/community/university/index.html. In addition, any inquiries regarding the University Program may be directed to education@redhat.com.

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 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, 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 SEC's Web site at http://www.sec.gov.

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