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Press release

Red Hat Announces Major Embedded Design Win to Help Cradle Create New Generation of Stream Processing Chips

Significant Cradle Deal Continues Red Hat's Momentum in Fast-Growing Embedded Systems Market

RALEIGH, N.C

The Cradle contract is a significant embedded win for Red Hat because it includes consulting services and porting of Red Hat's GNUPro embedded development tools, eCos and embedded Linux operating systems, to Cradle's Universal Microsystem platform (UMS). Cradle's UMS platform will make it possible for new generation of complex embedded systems to be developed by OEMs simply by redesigning software-rather than by constantly rebuilding the entire chip hardware.

"This win continues the tremendous momentum for Red Hat in the embedded arena as device manufacturers and innovators like Cradle, Ericsson, Hitachi, iObjects, Motorola, NetSilicon and Samsung turn to Red Hat to help create a new generation of computing," said Matthew Szulik, president and CEO of Red Hat, Inc. "Cradle's revolutionary processor architecture represents a breakthrough for critical hardware applications that is key to the Internet's expansion."

"The availability of world class tools and operating systems are a critical part of our silicon platform strategy," said Satish Gupta, president and CEO of Cradle Technologies. "The combination of Red Hat's unique technical capabilities, as well as its complete solution of tools, run-time and library technologies and brand leadership, with our UMS allows OEMs to leverage a rich set of re-usable components based on a foundation of Open Source. This is the blueprint for how stream processing systems will be built in the future."

Cradle's UMS was designed to join the classic microprocessor, microcontroller, and digital signal processor chip families as the first single-chip computing platform specifically designed to meet the stream processing requirements of an ever increasing range of consumer, business, and industrial products. The UMS' architecture allows highly complicated applications to be created predominantly in software - rather than with custom chips or expensive combinations of conventional processors, therby revolutionizing the way OEM's can develop products and bring them to market

International Data Corp. (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. Working with key semiconductor providers, original equipment manufacturers (OEM's) and operators, Red Hat is focused on bringing to market embedded platforms that are deployed and managed with customizable and scalable Internet-based services that improve the reliability, security and performance of Internet-connected appliances.

Red Hat has more than 10 years of unmatched experience in testing, releasing, and maintaining leading edge open source products and platforms based on a single source base for Linux and GNU. For more information on Red Hat Embedded Linux please visit http://www.redhat.com/embedded.

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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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.