Red Hat Launches Red Hat Network to Extend the Reach of Open Source Technology by Dramatically Reducing the Costs of Deployment 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 Red Hat Network, a powerful Internet-based service for deploying and managing open source platforms. Customizable preferences for security alerts, update management, and technical support improve system administrator productivity and enhance the security, reliability, and performance of networked systems. The service reduces total costs and speeds time to value for customers.

Red Hat is announcing a 60-day free trial of Red Hat Network for all Red Hat Linux 7 users. In addition, basic functionality will be available at no charge for all Red Hat Linux users. For further details and registration information, please visit www.redhat.com/network.

"Red Hat Network is the future of software -- an integrated set of technology and services that speed the deployment and reduce the costs of management for Internet infrastructure," said Paul McNamara, vice president of products and platforms at Red Hat. "Red Hat Network simplifies deployment and delivers proactive services to keep systems secure and reliable. By managing the constant stream of open source innovations through redhat.com, customers get maximum value from the open source development model."

"The high costs of skilled IT professionals can limit the promise of the Internet," said Billy Marshall, director of Red Hat Network. "I anticipate that Red Hat Network will double the productivity of system administration staff by providing a scalable, flexible solution for deploying and managing open source platforms. Enterprises, service providers, small businesses, and Internet appliance developers can now take maximum advantage of open source technology because Red Hat Network dramatically reduces the ongoing management costs of the rapid innovation model."

Red Hat is working with several significant key technology providers to maximize the value of Red Hat Network.

"eDirectory was designed with exactly this sort of deployment in mind - delivering large-scale customized services over the Internet," commented Eric Schmidt, Chairman and CEO, Novell. "Providing the management infrastructure for Red Hat Network is an excellent example of our stated goal - to provide Net services software that secures and powers all types of networks across all leading operating systems."

"AT&T is proud that Red Hat chose AT&T for our high-performing, highly reliable hosting services and our fast, dependable IP connectivity services," said Sandy Brown hosting vice president of AT&T Data and Internet Services. "Red Hat Network clients will benefit from the best of two premier internet companies for open source network and service support."

Red Hat Network capabilities
Red Hat Network technology will be a part of all of Red Hat's service offerings beginning in December, 2000. The features of Red Hat Network to be included with these offerings are:

• customizable update management services to keep systems secured and functioning during rapid open source development cycles



• security evaluation, notification and analysis services to help system administrators maintain the security of their networks



• Web-based management interface for portability and remote management



• tight integration with RPM to assure system software compatibility by automatically managing dependencies



• support services from experts in the open source community and from Red Hat for maximum productivity and speed of problem resolution

Red Hat Network brings benefits to a wide range of users. Enterprise IT organizations will be more productive because they have a connection to Red Hat for technology, expertise, and services. They can update functions, assure quality and security, and automate mundane system management tasks. Service providers can offer enhanced services and functionality to their customers through a managed deployment of Red Hat Linux that is secure, consistent and easily managed.

Users of Internet appliances and embedded systems running Red Hat Linux will have a reliable, fast source for new services and device maintenance in the field. Small businesses will take advantage of the cost and reliability benefits of Red Hat Linux without hiring expensive, full-time system management experts.

Red Hat Network free trial services
Red Hat Network capabilities available during the free trial period include:

• update management service to keep systems secure and functional during rapid internet discovery and development cycles
• integrated registration program with Red Hat Linux 7.
• customizable preferences for notification of security issues, bug fixes, and functional enhancements from Red Hat.
• Web-based management interface for ease of use and application portability.
• summary on-line status reports of registered systems.
• support forums from experts in the open source community and at Red Hat for maximum productivity and speed of problem resolution.

Pricing and availability of Red Hat Network
Red Hat Network is available to all Red Hat Linux 7 users beginning September 26, with functionality to be added for Red Hat Linux 6.2 users soon. Beginning in December 2000, Red Hat Network features will be integrated with all of Red Hat's service offerings. All Red Hat Linux users will be able to access certain levels of Red Hat Network for free, and greater levels of service will be available for customers of Red Hat's service offerings.

For the individual, proactive subscription services for information and technology updates will be available for as little at $9.95 per month. Small businesses will be able to receive Red Hat Network features as part of an integrated technical support offering, with prices beginning in the range of $400 per year per system. For large Red Hat Linux deployments within Enterprises and Service Providers, Red Hat will offer service packages that feature Red Hat Network and options for 24x7 technical support, Technical Account Owners, and broad systems management capability from $500 per system annually.

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 www.sec.gov.

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