Red Hat and NetSilicon Announce Partnership to Deliver Embedded, Open Source Solutions for Internet Appliances.

Business/Technology Editors

RESEARCH TRIANGLE PARK, N.C. & WALTHAM, Mass.--(BUSINESS WIRE)--Sept. 20, 2000--

Companies plan to demonstrate first product to combine Red Hat Open

Source Linux leadership with the NET+ARM family of networked

microprocessors at the Embedded Systems Conference, West in

San Jose, CA

Red Hat, Inc. (Nasdaq: RHAT), the leader in open source Internet infrastructure solutions, and NetSilicon, Inc. (Nasdaq: NSIL), the leader in networked microprocessing solutions, have announced a partnership to deliver open source products and services that accelerate time-to-market for manufacturers of Ethernet and Internet-attached devices.

Under the terms of this agreement, Red Hat will provide engineering services to NetSilicon and ongoing support to NetSilicon customers. The first product from this partnership is NET+Lx(TM), a development platform for Internet Appliances, running uClinux, which was ported by Red Hat to NetSilicon's NET+ARM(TM) processor. The product will be on display in the Red Hat booth (#1038) at the Embedded Systems Conference during the week of September 25.

Said Cornelius "Pete" Peterson, president and CEO, NetSilicon, Inc., "The next wave of computing is happening at the device level. With the availability of tightly-coupled software and silicon solutions, the intelligent device market will soon dwarf the desktop and server markets in annual units shipped."

The partnership brings together the resources and strengths of two trusted leaders in embedded technology. NetSilicon's NET+ARM processor has been developed specifically for embedded networking applications and is used by more than 250 customers worldwide. Peterson continued, "Combining the strengths of Red Hat in open source, GNU, Linux(R), real-time and worldwide support with the proven NET+ARM family of networked microprocessors provides our mutual customers with an out-of-the-box environment to rapidly develop Internet-attached devices."

"The NetSilicon solution is solid proof of Red Hat's engineering expertise in the areas of open source and embedded systems," said Michael Tiemann, chief technical officer, Red Hat, Inc. "As embedded devices become more ubiquitous, it is exactly this kind of prowess and creativity combined with the unique benefits of open source software that will drive the next generation of computing."

uClinux is a version of the Linux operating system that runs on processors with no MMU (memory management unit). It supports a variety of open source applications including webservers, mail clients and ftp clients. uClinux also supports the EL/IX applications programming interface (API). This provides for quick and easy porting of POSIX compliant applications to NET+Lx software and NET+ARM hardware.

"NET+Lx has lived up to its promise. In under three hours, we installed the development tools and had our first program compiled and running on the NetSilicon development board," said Stefan Steuerwald of SpheronVR, a beta user of NET+Lx. "We are very impressed with the product's stability and performance. We couldn't get the system to crash."

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.

IDC also 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.

About NetSilicon

NetSilicon, Inc. (Nasdaq: NSIL) is a leading provider of integrated system-on-silicon and software solutions used by device manufacturers to add Internet and Ethernet connectivity to their products. Once network-enabled, these devices can be managed, accessed and serviced from anywhere. NetSilicon's highly integrated solutions help manufacturers reduce time-to-market, lower their costs, and free their engineers from the difficult task of integrating multi-vendor networking components. NetSilicon embedded networking solutions are used in a wide array of intelligent devices including digital office equipment; medical data collection and patient monitoring units; vending machines; factory automation and process control equipment; power supply monitors; building access control and security systems; exercise equipment; point-of-sale terminals; Internet cameras and telephones; and vehicle diagnostic tools.

For additional company, product or financial information, please visit the NetSilicon Web site, www.netsilicon.com, send email to [e-mail], or call 800-243-2333.

About Red Hat, Inc.

Founded in 1994, Red Hat (Nasdaq: RHAT) is the leading provider 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 runtime solutions, developer tools, and 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. For investor inquiries, contact Lippert/Heilshorn at [phone].

NetSilicon and NET+Lx are trademarks of NetSilicon, Inc. RED HAT is a registered trademark of Red Hat, Inc. LINUX is a trademark of Linus Torvalds. NET+ARM is a trademark of ARM Limited and is exclusively sublicensed to NetSilicon, Inc. ARM is a registered trademark of ARM Limited. All other names and trademarks are the property of their respective owners.

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