Ocala, FL--"I was in the right place, at the right time, with the right thing," says Jim Vander Mey about the success of his company, Intellon Corp.
He also made the right decision. When he wanted to start a company in Florida after selling the printer company he had founded in New Hampshire, the areas he considered were perennial peanut hay ("Florida's alfalfa"), vertical-take-off airplanes, and home automation.
He went with the latter. Intellon sells ICs, boards, modules, and hardware and software development tools for designing home-automation networks and products. Such networks can control lighting, security, home appliances, HVAC systems, automated meter reading, and even industrial machinery. Annual sales have grown by more than 100% over the last two years.
The story starts in 1989, when Vander Mey began researching state-of-the-art automation products to install in his new home in Ocala, FL. His search led him to the Electronics Industries Association (EIA), which was working on a specification called CEBus (Consumer Electronics Bus).
CEBus, or EIA IS-60, began as an effort to standardize infrared remote controls for home audio and video components. It evolved into a standard for whole-house automation over multiple media, including twisted-pair cable, coaxial cable, power lines, and radio frequency.
Power-line problems. Key to the standard was controlling products over a home's existing power-line wiring. "The obvious drawback to CEBus was that all the media-except for power line-ran at 10 kbps (kilobits per second). Power-line CEBus ran at 1000 bps and would bottleneck the other media," says Tim Vander Mey, vice president of engineering at Intellon and Jim Vander Mey's brother. Together, the Vander Meys developed Spread Spectrum Carrier(TM) (SSC) technology-an inexpensive way to implement CEBus over power lines and radio frequencies at 10 kbps.
Myriad problems can make power-line and RF communications unreliable and expensive. These problems include electromagnetic interference, narrow-band frequency impairment, varying impedances, signal attenuation, fading, and multipath nulls-all results of the uncontrolled and noisy media environments. Intellon's SSC technology solves these problems by redundant signalling across a broad, or spread, frequency spectrum. If noise affects portions of a signal in some frequency bands, redundancy ensures that enough of the signal will get through for reliable communications.
Technology a hit. The advantages of SSC technology were clear to the EIA, which abandoned its proposed power-line technology and chose Intellon's as the power-line standard for CEBus. Later, the EIA selected Intellon's radio-frequency (RF) version of its SSC technology as the CEBus RF standard.
After the EIA's adoption of Intellon's technology, the company took off. Annual sales grew by 110% in 1992, 110% in 1993, and an anticipated 120% in 1994 when they hit the $1 million-plus mark.
"The CEBus market is still in its very early stages," says Myra Moore, senior analyst with the Dallas-based market-research firm Parks Associates, "but Intellon's in a great position. They are making the chip, and you've got to have the chip to make all these products talk to each other."
Private offering. "With the technology proven, protected with patents, and implemented in ICs, we convinced some major investors that this is really going to be a big thing," boasts Jim Vander Mey. To raise capital for continued rapid growth, Intellon-a privately held company-just completed a $7.5 million private offering. Investors include Boston's Fidelity Capital, Inc.; Investment Advisers, Inc. in Minneapolis; and Orlando-based Synagen Capital Partners, Inc.
Another company that thinks Intellon is a sound investment is AMP (Harrisburg, PA), which took an equity position in the company last year. The two companies are working on a bridge to link CEBus and SMART HOUSE, a home-automation standard with which AMP is involved. SMART HOUSE requires dedicated wiring that workers must install during building-the technology won't work for retrofits.
Other standards. "There's a saying in the engineering field: "The one good thing about standards is there are so many to pick from.' That's the problem," says Tim Vander Mey. "People want to have home automation resolved down to one standard."
SMART HOUSE is one of two other home-automation standards. The other, the Lonworks protocol from Echelon, Palo Alto, CA, is also a wireless technology, but companies need a license to use it. If the product needs a chip, companies must use Echelon's Neuron chip, which they can buy only from Motorola or Toshiba.
Small-town company. Intellon has about 30 employees, a third of whom are engineers. Right now, it has 8 to 10 positions to fill. Marketing Manager Eric Buffkin says that it's hard to lure engineers to Ocala, a small town in central Florida about an hour north of Orlando. He tries with tales of life outside big cities, and the company sweetens the pot by including company equity as part of key employees' compensation packages.
Christopher Yasko, who used to work at a large corporation in Boston, says Intellon feels less structured and formal: "Everyone is accessible, including the president. But there's no one to pass the buck to. If things need to get done, you do them."
For example, Yasko's job title is applications engineer, but he also functions as a marketing engineer/product manager, generates technical literature, supports key accounts, represents the company at trade shows, develops software, does customer presentations, and trains distributors.
Recent releases. Intellon's latest products include the CEBench development system and a family of four wall modules. The Windows-based CEBench comprises hardware and software tools for developing and testing CEBus products. After defining, designing, and testing an application, designers can compile, link, and download the application into a target microprocessor for in-circuit emulation.
Intellon's wall modules are the company's first end-products. They include: a relay; a triac, or dimmer; a load-shed module for utility management; and a serial I/O module for a modem-like link to a PC. The modules look like electric switches that can be mounted in a wall box to control electrical devices. They could be available at your local hardware store in 18 months.
Multiple markets. Home automation is just one market for Intellon's technology. Manufacturers are also using the company's components and subsystems to develop applications for:
Building control that lets companies reduce energy and installation costs by linking lighting, heating, ventilation, and air-conditioning systems into networks.
Security and access-control systems for industrial, commercial, and residential buildings.
Load distribution and management, load shedding, and automatic meter reading for electrical utilities.
Wireless networks for control and communications, such as point-of-sale terminals, self-serve gasoline pumps, and automated kiosks.
The customer list is impressive: Trane (HVAC controls), General Electric (electric meters), LiteTouch (lighting controls), Ademco (security systems), and Panasonic (audio/video systems). Europe's power-line regulations differ from those of the U.S., and Intellon makes products for the European version of CEBus, the EUBus. The company also has distributors in Norway, Israel, Korea, and Japan.
Big-name partners. Closer to home, a California project partners Intellon's CEBus technology with Pacific Gas & Electric Co., TeleCommunications, Inc. (TCI), and Microsoft in an interactive multimedia trial. It will offer up to 2,000 PG&E customers an array of goods and services through a "home electronic highway."
Microsoft is developing the operating software for networking home devices, which includes interfaces to Intellon's CEBus protocols for both power-line and RF products. Jim Vander Mey predicts that using the software via a TV interface will be "a lot easier than programming your VCR." TCI will provide the set-top converter boxes for interactive TV and two-way terminals to monitor energy usage. PG&E will offer energy-management products and services.
Energy management. This may seem to be an odd partnership, until you consider the role of the power company. Many utilities periodically face demand that pushes generating capacity to its peak. In most cases, these peak demands could be satisfied if some non-essential consumption were curtailed. One way to do this is time- of-use pricing, which increases the cost of energy during peak demand.
If you have a CEBus meter from the power company, you could buy a CEBus product to read the meter and find out the rate schedule. When the home network receives a signal that the price of energy is about to increase, nonessential products could shut themselves off until peak demand passes.
"Time-of-use pricing for electricity will help drive CEBus technology into the home," notes Tim Vander Mey. "Once you can save people money, they'll be interested in getting the technology."