November 27, 1988

Looks like A.C. “Mike” Markkula, who’s managed to crest two big technology waves thus far in his career — integrated circuits at the original Fairchild Semiconductor, and personal computers as a co-founder of Apple Computer — may be poised to ride the wild surf once again with his new company, Echelon.

Don’t bother to look here for analysis or outside commentary about the feasibility of Echelon’s success. Paranoia, even more than deadline pressure, made it risky to dial around town to find out what anybody thinks of Markkula’s new Big Idea. At press time, these were the first public words written about Echelon. So this time, for once, you get to make up your own mind.

And just in the nick. Echelon sources intimate that Monday the Los Gatos company will announce the addition of an important new staff member. “Mike’s only half the equation,” is the quote.

After more than two years of research, Echelon’s prototype product hopes to tap what the company sees as a $35 billion market in what it’s coined as “local operating networks,” or LONs.

“LON,” which not coincidentally also happens to be the trademarked name of Echelon’s product (Eche-LON, get it?), is essentially a packet network that connects and controls Echelon-equipped smart devices (anything from garage door openers to security or air-conditioning systems) over any media, from coaxial cable to twisted-pair phone wires to power line carriers, fiberoptics, infrared and radio frequency connections. It is a superset of such systems as the X-10 home controllers sold under various names by such companies as Leviton and Radio Shack.

“X-10 is a primitive form of LON,” says Echelon marketing executive Tony Livingston. He claims X-10’s technology is more than a decade old and “is not reliable enough” to control the newest generations of smart appliances and devices that are filling factories, offices and homes.

Each LON is comprised of “Neurons” (custom chips that function as universal control and communications devices), media (devices that couple Neurons to different media), and circuitry that transforms signals into sensing or action. Each Neuron has a unique 48-bit identifier. They won’t run out of IDs for a while. “If we sell 10 billion per year, we still have 10 million years worth of (unique) numbers,” Livingston claims.

Here’s an example of how LONs will work. Let’s say you want the hall light switch to be on the other end of the hall. Today, you’d have to cut a hole in the wall, run new wires, and connect them to a new switch. But Echelon is hoping that soon you’ll be able to buy an Echelon kit at the hardware store that contains a stick-on switch plate and a gadget that screws in between the light bulb and socket, both with Neurons built in.

First you’d screw in the piece that goes between the bulb and the socket (which is connected to the existing power line). Then you’d stick on the light plate where you want it, and flip the switch. The transmitting Neuron doesn’t need any hard-wired connection. It uses RF to seek the “unassigned” Neuron that’s in the base, and on goes the light.

“After you get a few (Echelon devices) in the house, you can get a controller” similar to the more sophisticated remote control devices on the market today, says Livingston. It would likely contain a keypad and display. Or, he says, large installations such as office buildings or factories could write software for computer control of the Echelon devices.

Here’s the rest of the plan: Echelon plans to sell only to outside vendors, who will build Neurons into their appliances or devices under the direction of Echelon. Neuron factories, like DRAM factories, eventually will be optimized to the point where a single node will cost $1, instead of today’s estimated $200.

The genesis of the idea was back in the Apple days, when Markkula was helping bring computer neophyte John Sculley on board. He made a rather simplified chart of the various available computer technologies, says Livingston, all the way down to smart appliances in the $100 range.

The fact that nothing seemed to exist below that range troubled Markkula, and when he backed out of Apple’s daily operations, he began pondering what might lie in the $1-$100 range.

He began to see that many technologies, once priced too high to be considered commodities, were beginning to come down in cost and size. He hired a group of engineers to come up with a product. “We combined all this technology in its lowest cost form, and dreamed up the way it could be used in an internationally standardized way,” says Livingston.