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Press release

Industry Leaders Invest in Red Hat to Accelerate Linux Success

Compaq, IBM, Novell, and Oracle Take Equity Positions in Leading Linux Software Builder to Help Bring Powerful Open Source Operating System to Their Customers

Research Triangle Park

Research Triangle, N.C.-March 9, 1999-Red Hat, Inc. , the leading builder of the Linux operating system, announced today that it has accepted offers of equity investments from Compaq, International Business Machines (IBM), Novell, and Oracle Corporation. These industry leaders will all take minority equity positions in Red Hat. The financial terms were not disclosed for any of these relationships by Red Hat or its partners.

The announcement follows months of tremendous momentum for privately-held Red Hat, including equity investments from Intel, Netscape and venture capital firms Greylock and Benchmark Partners in September 1998.

"Red Hat chose Compaq, IBM, Novell, and Oracle as equity partners because of their leadership positions in the computing industry. Their support of Red Hat is a broad endorsement of the Open Source Software model that is changing the entire software industry and driving the rapid adoption and success of Linux," said Robert F. Young, co-founder and CEO of Red Hat Software. "The support of a such a stellar group of leaders creates even more momentum for the Open Source Software movement and for Linux as a powerful, reliable, cost-effective and safe choice for any computing environment."

More than 10 million users currently run the Linux operating system. According to IDC Research, Linux was the fastest-growing server operating environment in 1998, capturing more than 17 percent of all server operating system shipments. Red Hat, Inc. builds, maintains and provides technical support for the Official Red Hat Linux operating system. Linux runs on Intel, Alpha and Sun SPARC platforms and will soon run on PowerPC systems.

Today's announcement of equity funding by the leaders of the computing industry caps a month of major announcements from Red Hat. Hewlett-Packard, Compaq, Dell and IBM each announced plans to support Red Hat Linux on a variety of server and workstation systems. At last week's LinuxWorld Expo, Red Hat unveiled a new web portal (http://redhat.com) designed to be the primary web destination for anyone interested in Linux news, support, products and community information.

About Linux

Linux is the cooperatively developed POSIX-oriented, multi-user, multi-tasking operating system used worldwide. Linux is strongly differentiated from virtually all other operating systems because it is "open source" software, with the source code freely available to all users. Unlike binary-only operating systems that restrict access to the source code, Linux benefits from a worldwide community of highly experienced programmers and technically savvy academics who have the access to enhance and improve the system. Linux is used as an exceptional-value, fully functional UNIX workstation for Internet servers and other applications. Red Hat Linux is maintained as "freely distributable" software available from many sites on the Internet.

About Red Hat, Inc.

Founded in 1994, Red Hat, Inc. is based in Research Triangle Park, NC, where it builds and maintains the award winning Red Hat Linux operating system. Working in cooperation with a huge development team of research, academic, and commercial software developers over the Internet, Red Hat's goal is to build the most accessible and advanced operating system available anywhere. Red Hat Linux for Intel, Compaq AlphaServer, and Sun SPARC platforms continues to gain recognition in the computer industry. From 1996 to the present, Red Hat Linux was named InfoWorld's Product of the Year three times, was given a Productivity accolade in Software Development's "Jolt" Awards, was named an Environment/Desktop finalist in the Ziff-Davis European Excellence Awards, won the editor's choice awards from both the Linux Journal and Australian Personal Computing magazines, and won the "Just Plain Cool" award.

About IBM (NYSE: IBM)

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. IBM creates, develops and manufactures the industry's most advanced information technologies, including computer systems, software, networking systems, storage devices, and microelectronics. The fastest way to get more information about IBM is through the IBM home page at http://www.ibm.com.

About Novell (NASDAQ: NOVL)

Novell, Inc. is the world's largest network software company and the leader in directory-enabled network solutions. Novell solutions make networks more manageable, secure and affordable for organizations of every kind and size. Novell's worldwide channel, developer, education and technical support programs are the most extensive in the network computing industry. For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom.

Novell Internet Equity Fund

The Novell Internet Equity Fund promotes Novell's interests in advancing innovative networking technologies. The $50 million fund typically makes investments in development-stage software companies that are in their first or second rounds of financing. The fund is focused on software products that support NDS and Java applications that run on servers, such as Novell's NetWare 5, for distribution across networks. Companies interested in the Fund can find more information about it at http://developer.novell.com/fund/.

About Oracle

Oracle is the world's largest enterprise software company. For more information about Oracle, visit our Web site at http://www.oracle.com/

Common with UNIX footnote

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

For more information or to interview representatives from the participating companies, contact these people:

Compaq: Kristen Wilson kwilson@golinharris.com 617-266-8400

IBM: Theo Chisholm, theoc@us.ibm.com 914-766-1180

Oracle: Elizabeth Orgel, eorgel@us.oracle.com 650-506-2921

Novell: John Pilmer, jpilmer@novell.com 801-222-5109

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About Red Hat

Red Hat is the world’s leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, and open source communities, Red Hat helps create relevant, innovative technologies that liberate resources for growth and prepare customers for the future of IT. Learn more at http://www.redhat.com.

Forward-looking statements

Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: risks related to delays or reductions in information technology spending; the effects of industry consolidation; the ability of the Company to compete effectively; the integration of acquisitions and the ability to market successfully acquired technologies and products; uncertainty and adverse results in litigation and related settlements; the inability to adequately protect Company intellectual property and the potential for infringement or breach of license claims of or relating to third party intellectual property; the ability to deliver and stimulate demand for new products and technological innovations on a timely basis; risks related to data and information security vulnerabilities; ineffective management of, and control over, the Company’s growth and international operations; fluctuations in exchange rates; and changes in and a dependence on key personnel, as well as other factors contained in our most recent Quarterly Report on Form 10-Q (copies of which may be accessed through the Securities and Exchange Commission’s website at http://www.sec.gov), including those found therein under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations". In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic and political conditions, governmental and public policy changes and the impact of natural disasters such as earthquakes and floods. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.