Company Profile: Echelon Corporation

Steve Nguyen, Director of Corporate Marketing, Echelon Corporation Courtesy of Echelon Corporation

Echelon (Nasdaq: ELON) Corporation, celebrating its 20th year in business, is a Silicon Valley (CA)-based company that is a global provider of networking technology used to manage and reduce energy consumption. Some of Echelon Corporations’ control systems have been applied to The Louvre; New York City’s subway trains; and Seoul's World Cup football stadium. Echelon Corporation is a member of The Business Council on Climate Change. In the following Q&A, Steve Nguyen, Director of Corporate Marketing at Echelon Corporation, will inform you about the company’s product line, clients, and the sustainability movement in the Bay Area.

Adam Busch, Co-Publisher & Owner, Green Space Today: Echelon has been in business for 20 years. What has enabled Echelon to stay completive in the Silicon Valley?

Steve Nguyen, Director of Corporate Marketing at Echelon Corporation: Echelon’s control technology platform, the LonWorks® platform, provides a sound and fundamental solution to those companies wishing to control, monitor, or automate processes, equipment or entire facilities and buildings. The need for this hasn’t diminished at all. In fact, the need has increased as we strive to decrease our use of electricity to become more efficient. When one thinks about the notion of being efficient, whether with regard to the energy consumed by a building or the streetlights in a city, it all begins with being able to monitor and control the thing that actually consumes electricity. This requires a control network and the best control networking technology available is the LonWorks platform.

AB: What dramatic changes have occurred in Echelon and in your industry from 1989 to 2009? How has Echelon managed to modernize its products through these years?

SN: We embraced the Internet by building a connectivity platform that takes any device built on our technology, even those that were installed years before the rise in use of the Internet, and makes them Internet aware. Any LonWorks based device can be monitored, controlled, and managed over the Internet. This fundamentally changed perceived value of control networks, e.g., lighting systems, and essentially has enabled energy aware environments. By that I mean that now buildings, homes, factories, schools, city lights, everything really, can be respond to the needs of the grid to save energy.

AB: How can the Bay Area and our country become greener through Echelon’s product line?

SN: Demand energy awareness. From buildings to homes to city infrastructures, we need to find a way to either require or cajole everyone to work together to make things responsive to the grid. That could be in the form of buildings that can diminish their energy use because a utility publishes a request to do so on their web servers, or maybe homes that allow a utility tell it to use less electricity, or even streetlights that dim when there is no traffic and no pedestrians walking by. All of these examples can be implemented with Echelon’s technology, and in fact are being implemented in various locations around the world today.

AB: What new accomplishments has Echelon achieved within the last two years?

SN: One has certainly been to go from a literal standstill to being the world’s leading provider of advanced metering infrastructure solutions (AMI). Our NES System is transforming the way utilities think about managing electricity for homes. The benefits for AMI, also known as smart metering, are huge to us as individuals and also provide huge environmental benefits in the form of lessening the need to build more power plants to meet our energy appetite.

One other is that the protocol for our LonWorks platform has new become an international standard – ISO/IEC 14908. This means that in addition to being a standard in a number of countries, the global standards setting body has recognized that the platform is here to stay, extremely valuable, and will provide long-term benefits across many markets.

AB: Thousands of hard-working Americans have lost their jobs in our recessive economy, including lay-offs by top, Bay Area firms such as Google. Do you feel that through the innovation of green technologies, green jobs will soon be created?

SN: Yes. Creating energy aware infrastructures in buildings, homes, cities, schools, and factories requires a lot of smart and skilled people – from those that design applications to those with the skills to install the equipment. For some, like those that install heating or lighting systems, it means increase business as retrofits occur. For others, it’s a new business opportunity as new companies form to supply the goods and services required to become more energy efficient as a nation.

AB: Why has the Bay Area been a valuable headquarters for Echelon?

SN: The Bay Area provides Echelon with a deep and talented pool of people that think innovatively, work hard, and are extremely creative. We’re a tech company at heart, and Silicon Valley is still the world’s best technology region.

AB: How can the Bay Area become more sustainable?

SN: Focus on making what we’ve already got more efficient. Reward companies and homeowners for doing more with less. Innovative programs like demand response – where a home or company is rewarded for using less electricity when there’s a lot of demand on the grid during hot days – are the types of things that make the economy more efficient. The reality is that the technology for making many things more efficient was invented here in the Valley. We believe that a big part of the challenge is simply better knowledge. For instance, do any of us really know the cost of keeping a router plugged in 24/7? Or the receiver for our music system? Simply monitoring these types of devices with simple plug-in modules is a huge step in the right direction. I guess you could say that sustainability begins with knowledge.

AB: Who are some of Echelon’s long-term customers and who are some of Echelon’s new partners?

SN: Many of our long term customers are the leaders in the controls industry – companies like Honeywell Home & Building, TAC, Philips, or Johnson Controls. These companies have put in many of the world’s heating & air-conditioning systems and are key players in the drive for increased energy efficiency in buildings.

Some our new customers and partners are the innovative utilities around the world that are building creating advanced metering infrastructures. These include utilities like Duke Energy, Vattenfall (Sweden), and Nuon (The Netherlands).

We’re also working with large companies or organizations that are really leaders. These would include McDonalds that is using our technology for their Kitchen of the Future; the Army Corps of Engineering that has created a building specification around our technology for the Army, Navy, and Air Force; and PG&E that has a demonstration of managed streetlights up and running to show energy efficiency and the operations benefits of controls.

AB: Do you feel that residents (home owners) are financially prepared to invest in smart homes?  If so, what evidence backs this up?

SN: We think that the day of the smart home is still on the horizon, though nearer today than yesterday. Utilities and other large service providers are what will drive this market and the key benefit will be energy efficiency. Once the network is in place, even if it’s only a smart meter speaking to a smart thermostat, the market will crack wide-open. Consumers will want to do more, and so will service providers.

AB: What does the near future hold for Echelon and its product-line?

SN: We think that we’ll eventually see our customers’ business grow (driven by energy efficiency) on a worldwide basis. This will hold true for our control networking product line as well as our advance metering infrastructure product line. As the market accelerates, we’ll evolve and refine our products to meet market needs. Since the fundamentals of our product lines are extremely strong, mostly we would expect to see improvements to our product that make solutions faster to develop, easier to install, and cheaper to implement.