September 23, 1996

The Internet may be getting most of the media attention these days, but computer networks of acompletely different variety are steadily finding their way into industrial plants, commercial buildings and transportation systems.

Largely invisible, these control networks monitor and adjust how much electricity we use and when, the movement of the mass transit systems upon which we travel, and the flows of work and climates in many of the factories and buildings where we work.

And a leading vendor of these industrial networks may soon be heading into our houses, too.

Echelon Corp., started in 1988 by an Apple Computer co-founder, A.C. Markkula, and still privately held, says that its technology is already the de facto standard for industrial “control networks,” as they are known. But the big lure for control-network vendors like Echelon is the hundreds of millions of buildings that we call home.

Many companies are already selling control-network products for the “smart home,” where digital technology is used to control security systems, heating and air-conditioning and sprinklers. They include some 50 companies that sell products based on a technical standard known as Cebus, as well as a popular home network technology from a company called the X-10 Group, which is sold in Radio Shack stores.

And now Echelon is making its move. Earlier this month, the Electronic Industries Association, working with the American National Standards Institute — or ANSI — agreed to evaluate Echelon’s Lonworks technology as a potential home-control standard.

The only other such standard is Cebus — which stands for “consumer electronics bus.” Cebus, an industry effort that began as a project called Home Net, has been in development for more than 10 years and is now in the process of final accreditation as an ANSI standard.

Though most of the existing home network systems are able to use a house’s existing electrical and phone wiring (often, supplemented by radio frequencies and infrared signals), they require some central point of control — a homeowner’s personal computer, a wall-mounted keypad or, in the case of many home-security systems, a telephone connection to the network’s central controller.

What is unique about Echelon’s technology is that its control networks are distributed: each part of the network contains enough intelligence to operate without being told what to do.

Each Lonworks node — whether installed in a train’s brakes, a golf course sprinkler or a skyscraper’s ventilation system — contains one of Echelon’s proprietary-design Neuron chips. Any device containing one of these chips can be separately programmed to perform virtually any kind of control task on its own.

For example, one of Echelon’s customers, a utility company in Texas, is testing Lonworks in 2,000 households. Consumers can program their heating and air-conditioning systems, as well as individual appliances, to make optimal use of electricity as the utility’s rates rise and fall between peak hours and off-peak periods.

In addition, while most of today’s home networks can be controlled only from a single point — a security system’s keypad, for example — a Lonworks network can use a specially designed thermostat, a personal computer, a keypad or all three to let users control the entire system’s function from several places in the home.

And because all Lonworks parts are designed to work together, no matter who manufactured the device, Echelon has insured that its customers — including supermarkets, petroleum plants and even slot machine makers — can buy parts from multiple vendors.

But the technology of Echelon, based in Palo Alto, Calif., is only part of this Silicon Valley story.

Markkula founded Echelon eight years ago with the idea that the plummeting cost of sophisticated digital technology could make home automation inexpensive and easy. As is often the case, the process turned out to be neither.

Within a couple of years, the company decided that to stay in business, it would have to refocus its efforts.

That’s when Markkula hired Kenneth Oshman, a co-founder and the aggressive chief executive of Rolm Corp., which in the 1970s and early 1980s successfully challenged AT&T’s lock on the telephone equipment market.

A few years after helping sell Rolm to IBM, Oshman took over Echelon and devised a strategy that finally appears to be paying off. After signing a couple of big guns to manufacture its Neuron chips — Motorola and Toshiba — Echelon chose to license the rest of its Lonworks technology to all comers.

As a result, some 2,500 companies are manufacturing and selling Lonworks products, and there are more than 3 million Lonworks nodes in service in this country and abroad.

For all that, though, the effort to make Lonworks a standard in the home is somewhat risky for Echelon, which so far has made only small inroads into the consumer market.

In order for Lonworks to become an ANSI standard — a designation that could help make Lonworks a uniform, universal technology — the company must agree to turn over its technology for scrutiny by the Electronic Industries Association.

The risk with this standards-review process is that the technology could be pushed and pulled out of shape by Echelon competitors on the committee who are eager either to neuter the Neuron, or at least to make Lonworks look and feel more like their own products.

But Oshman says he is not worried that anyone will be able to make a strong case for tweaking the technology. In any case, he says, it is worth the risk because a widely accepted standard can only help expand the market for home control networks — even if it means brisk competition.

“It’s ultimately in our interest to become a standard,” Oshman said. “For every percent of market share we might lose, we think the market will grow many more percent.”

Denise Caruso