Overexuberance and Retrenchment on ELON
Upon Mike Buckley's urging, I'm posting an edited version of a private message to him backing down on some of my thoughts on Echelon.
Echelon has, I think, a great chance of being the leader in a technology of an enormous mass market interest -- embedded device networking allowing Intra and Internet access to everything from the temparature of the refrigerator to the lights on the back of the house to -- perhaps the closest to take-off -- industrial and business processes.
It has a partnership with Cisco, nine years of work on its product, and it has successfully enshrined its open LonWorks system as the standard in some crucial areas.
It is not, however, a Gorilla, and may not become a King (although I'm hoping). It is simply a company with impressive technology and a great position in the beginning of what instinct tells me is going to be an enormous market.
It clearly isn't at the beginning of a tornado. Its revenue
growth is not impressive, it has never broken even in its life, and it survives on dreams of a great future.
If it can protect its LonWorks standard from being overthrown, and if it can successfully market its technology and ramp up production, it may become a powerful player.
Some of the difficulty in really analyzing this company is the reticence of its management -- interviews with its CEO is like trying to pry state secrets from the KGB.
Their "neuron chip" -- which is critical in every embedded device that will make this technology work -- is not built by them but is licensed to Cypress, for which they get a royalty.
They also sell the routers, interfaces, tools, etc, to build and maintain the entire system.
If this technology takes off, they may become a king. Right now it's merely a bet, whether good or bad, a far cry from other companies farther along in the gorilla game.
However, I believe its possibilities are enormous and its positioning impressive.
It should be watched for impressive revenue growth.
But goddammit, it's exciting!
:D
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