Echelon : some thoughts from a GG listserv member(dated March, but probably relevant). apologies for the (lack of) formatting, I did a cut/paste job.
cheers, kumar
--------------------------------
To: Gorilla Game discussion list <gg@webcom.com>
Date: Thursday, March 02, 2000 5:43 AM
Subject: Echelon (ELON)
>For the past year I have mmostly been a lurker/listener on this board.
I've
>also been watching Echelon since last February. So, with the caveat that
>I'm still, basically, a beginner in serious DD, let me attempt a beginners
>primer for Echelon. First, while it might not currently be a gorilla due
to
>the market cap and year to year revenue growth, as previously mentioned, it
>is nevertheless true that this company has genuinely been designed from its
>very beginning to be a gorilla. To me, the important question is not
>whether it is or isn't a gorilla right now, but whether or not it has the
>genuine capability to live up to its own goals.
>
>The CEO of Echelon is Ken Oshman, who joined Echelon in 1988, and who came
>with a successful track record. Oshman co-founded the Rolm Corporation in
>1969 and served as chief executive officer, president, and director until
>Rolm was acquired by IBM in 1984. He then served as a vice president of IBM
>until 1986. He has MS and Ph.D. degrees in electrical engineering from
>Stanford University. He is also a current member of the board of directors
>of Sun Microsystems. This is important because Sun's Jini is often
>mentioned as a competitor to Echelon, but it is not (More about this
>later.).
>
>Echelon has two components:
>1. Echelon: the company
>2. LonWorks: the world-wide internet interoperable systems network, created
>and developed by Echelon: the company.
>
>Echelon built the LonWorks network over many years and LonWorks has been
>designated as the standard networking system for a number of industries,
>Standard's boards, as well as for a few countries. A short while back
>Finland made LonWorks their standard, causing a significant jump in the
>stock price.
>
>A question previously asked was: When will the Tornado develop for control
>network technology?
>
>Don't know. But the concept of "smart homes" seems to get the most media
>attention. All we know is that the capability for everything to be
internet
>connected is rapdily approaching. TV's, kitchen applicances, garage doors,
>lighting devices, cameras, sprinklers, you name it. But those items are
>just the outer layer of system connections and will create only beginning
>winds to this tornado. While not leaving out that market, Echelon has been
>stealthly developing their hold onto those places where the real energy is
>located. They have done this by identifying four main areas for product
>growth: buildings, transportation, industrial automation, and home
>automation. And it's the entire breadth of these combined areas for which
>Echelon/Lonworks has no competition.
>
>A question previously asked was: Who is their competition?
>
>There are certainly other companies which have developed control systems
>networks, but as I understand it, they work only when connected to devices
>made by the same vendor, usually themselves. The main competitor which is
>mentioned is Bacnet, developed through Rockwell [<http://www.bacnet.org>].
>But because
>Echelon/Lonworks was purposefully developed around open architecture and
>interoperability, which allows devices from all vendors to be connected to
>each other, LonWorks has been able to develop a much wider networking
>capability and, hence, a much larger audience for its own products. From
>any competitive standpoint, the LonWorks open network is far superior to
the
>non-open network.
>
>Echelon designs and makes their own products such as routers, transceivers,
>control modules, and other tools. They do not, however, have proprietary
>rights over these products. [Products: <http://www.echelon.com/products/>]
>
>Other companies are free to design their own products. Echelon hopes that
>it will be able to maintain it's first mover status and its own quality
>products to give it a competitive edge. This week, Cisco praised the new
>ilon router, causing the recent large jump in stock price. However, there
>are also other main sources of revenue, an issue which I will address
later.
>
>Another company which goes out of its way to identify itself as an Echelon
>comptitor is Net Silicon [NSIL: <http://www.netsilicon.com/] And while
NSIL
>does connect devices to each other, they do not have the world-wide
LonWorks
>network with its already granted standards, nor the countless working
>relationships, nor the existing LonMark Interoperability Association and
its
>partnerships with Cisco, Sun, etc.
>
>LonMark Interoperability Association:
><http://www.echelon.com/partners/lonmark/Default.htm>
>
>Concerning Sun's Jini, this link takes you to a series of articles on the
>Echelon site about Jini:
>http://search.echelon.com/query.html?rq=0&col=echelon&col=ni&qp=&qt=jini&qs
=&qc=&pw=100%25&ws=1&la=&qm=0&st=1&nh=25&lk=1&rf=0&oq=&rq=0
>
>For one example of the relationship between Echelon and Sun/Jini, here is
>the lead sentence of one article: "LONWORKS extends the reach of Jini
>technology to control devices With no incremental cost With no incremental
>development With no incremental time to market With no loss of
>functionality... "
>
>Now, along with the products produced by Echelon, and the LonWorks system
>network, it's also important to know about the neuron chip, for this is the
>heart of the whole Echelon enterprise and upon which the main revenue
source
>is based. To connect to the LonWorks network, one needs neuron chips.
>Echelon designed and patented the original neuron chip. Then they
>outsourced the making of the chip to Motorola and Toshiba. Last year,
>Motorola didn't renew their contract and Cypress came on board. Toshiba
>renewed for ten more years.
>
>The patent for the neuron chip can be downloaded from this page at Echelon.
>It's the second article from the top:
>http://search.echelon.com/query.html?col=echelon&col=ni&qp=&qt=neuron+paten
t&qs=&qc=&pw=100%25&ws=1&qm=0&st=1&nh=25&lk=1&rf=0&rq=0
>
>On page 5, item 6A, of this document, it states that Echelon is to receive
>15 cents for each chip sold. Oshman has repeatedly said that there will be
>trillions (plural) of neuron chips sold during the next decade. These
>royalties based on an expanding market is thought to be one of Echelon's
>golden geese.
>
>Just to show Echelon's range, here is the link to recent headlines, and a
>few first lines from a important articles:
><http://www.echelon.com/Company/press/Default.htm>
>
>--German Group Selects Echelon's LNS Software As Its Standard
>--Cisco Certifies Echelon's i.LON 1000 Internet Server
>--Echelon Receives Worldwide Commitment From Honeywell For Its LONWORKS
>Systems
>--Russian Nuclear Power Plants Run Safely with Echelon's LONWORKS Networks
>--Japan's Largest Information Services Company Becomes an Echelon
Authorized
>Network Integrator
>--Echelon's LONWORKS Technology Chosen as Finland's Preferred Home
>Networking Standard
>--Sun's McNealy Presents the Networking of Everyday Devices with Echelon's
>LONWORKS System
>--Echelon's Networking Technology Adopted As ANSI Standard
>--Echelon Corporation Takes Leadership Role in Microsoft?s Universal Plug
>and Play Forum
>
>Another salient point is that Echelon received funds from the highly
>respected Silicon Valley venture capital group Kleiner, Perkins, Caufield &
>Byers, and can be found on their website <http://www.kpcb.com/>.
>
>All in all, the breadth of Oshman's original vision is amazing, even to a
>beginner like me. While there are no guarantees, it seems impossible to
>deny the incredible system which Echelon has designed and created. And the
>most amazing thing is that this company is still in its infancy. As the
>previous questioner acknowledged: When will the Tornado develop for control
>network technology? It hasn't even started yet.
>
>However, the more important question about Echelon's gorillaness, it seems
>to me, has to do with whether or not the arena of control systems will
>actually become a tornado alley. If the answer is no, then all bets are
>off. But if it's yes, and that certainly looks to be the case, then the
>eyes of the investment community must turn to Echelon which has been
>patiently waiting to be discovered for what it has already done. This time
>the tornado, if I may mix this metaphor, may be about to become a
>full-fledged interoperable parade.
>
> |
