In February 1988, in Palo Alto, California, a startup company was founded by Armas Clifford "Mike" Markkula Jr. the grandson of a Finnish immigrant to the US. That company, Echelon Technology, would go on to develop the LON protocol, and help pioneer the evolution of open standard networking platforms, making a big contribution to the IoT as we know it. In this article, we trace the journey of Echelon up to its most recent chapter, when it joined the IoT Energy Harvesting specialist EnOcean last week. 

Mike Markkula was the original angel investor, first chairman, and second CEO for Apple Computer Inc., providing the critical early funding required for the firm to start. As an experienced engineer, Markkula wrote several early Apple II programs but also was known for his managerial support in the early days of Apple, his role was described by the NY Times as “adult supervision” for his younger co-founders Steve Jobs and Steve Wozniak. At the company's founding, Markkula owned 26% of Apple, the same as Jobs and Wozniak, who often credit Markkula for the success of Apple more than themselves.

“You should never start a company with the goal of getting rich,” Mike Markkula famously said. “Your goal should be making something you believe in and making a company that will last.” 

Markkula served as Apple CEO from 1981 to 1983 before switching his attention to the establishment of Echelon Technology in 1988, which completed its IPO in 1998. For 30 years Echelon drove the development of open-standard networking platforms for connecting, monitoring and controlling devices in commercial and industrial applications.  However, commercial success remained elusive post-IPO, and they were not able to capitalize on the technologies potential. By 2014, when quarterly revenues dropped from $24.8 million to $15 million, they exited the Smart Grid business and the "writing was on the wall".

In June 2018, Adesto Technologies announced that it would acquire the entirety of Echelon for $8.50 per share. The acquisition price represented a total equity value of approximately $45 million and a total enterprise value of only $30 million. With the acquisition of Echelon, Adesto was looking towards the industrial IoT market, where they wanted to begin providing software, systems and solutions expertise, rather than just semiconductors. At the time, Ronald Sege, then Chairman and CEO of Echelon said there were “an estimated 140 million installed LON-powered devices..."

Less than two years later, in February 2020, UK-based Dialog Semiconductor announced a definitive agreement to acquire all outstanding shares of Adesto, including the Echelon technology. The acquisition of Adesto seemed again to be driven by a desire to expand into the growing IIoT market, adding the firm’s approximately 270 employees and a portfolio of industrial solutions.

“This acquisition substantially enhances our position in the Industrial IoT market,” said Jalal Bagherli, then CEO of Dialog. “Adesto’s established strength in connectivity solutions and highly optimized products for building and industrial automation perfectly complements and adds scale to our Industrial IoT portfolio.”

Just 18 months later, another semiconductor company came calling! Japan-based Renesas Electronics Corporation announced the acquisition of Dialog for €4.8 billion in August 2021. Echelon was joining its third new semiconductor company in just three years.

“My previous company was Echelon, that was acquired by Adesto, and that was acquired by Dialog, and now that was acquired by Renesas,” David Sciarrino, then IoT Sales Manager for Dialog, told Memoori in a 2021 webinar. “Echelon helped create the IoT market, it was the initial vision of our founder, Mike Markkula. He thought we could push intelligence down into every edge device and have them talk to each other, and that was not something being done at the time. Over 15-years ago, Echelon created that market and probably the first smart server, which could talk to all these devices and provide that data to enterprise or cloud applications.”

Echelon’s journey around the smart building world is not over, however, as yet another deal changes its course. On October 10th 2022, Germany-based EnOcean announced the acquisition of the assets of the Edge Computing Solutions Business from Renesas, which encompass much of Echelon’s role at Renesas. For the first time in four years and four months, Echelon has been separated from its growing list of semiconductor parent companies. Now the firm, in the shape of an Edge Computing Solutions Business, finds itself within energy harvesting IoT specialists EnOcean, a company that was founded 13 years after Echelon. 

“Lasting companies know how to reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument company, then became a calculator company, then a computer company. Apple has been sidelined by Microsoft in the PC business. You've got to reinvent the company to do some other thing, like other consumer products or devices,” said Mike Markkula in the 1980s. “You've got to be like a butterfly and have a metamorphosis.”