Echelon and Kolon Data Communication Collaborate to Expand the Market for Control Systems, Energy Management and Conservation.

SAN JOSE, Calif. & SEOUL, South Korea -- Echelon Corporation (NASDAQ:ELON), a global networking company providing technology and solutions for controls, energy and environment management, and smart metering, and Kolon Data Communication Co., Ltd. (KDC), a market leader in information technology (IT), today announced plans to collaborate to expand the market in Korea and other countries for LonWorks(R) control networks and energy management through integration services, training programs, marketing, product development and smart metering. Among the planned marketing efforts in the collaboration is the establishment by KDC of a "LonWorks Business Center" to promote energy and automation solutions that integrate both IT and control networks as well as to develop the Korean market for smart metering. Additionally, KDC plans to take a leadership role in establishing the LonWorks platform as a Korean national standard for control networking. KDC believes that the LonWorks business can ramp up rapidly and has a 2008 revenue target of $20 million in the Korean market resulting from its planned collaboration with Echelon.

The signing ceremony in Seoul today, attended by KDC CEO and President Bo Kyung Byun, Echelon CEO and Chairman Ken Oshman, and Echelon President and COO Bea Yormark, marked the start of the collaboration between the companies.

"On January 22, Kolon chairman Woong Yeul Lee announced the Kolon Group's new long-term focus on solutions that improve lives, increase profitability, and build global strategic partnerships," according to Bo Kyung Byun. "The planned collaboration between KDC and Echelon is the first step in this plan, and will leverage KDC's deep IT integration capabilities and Echelon's market-leading energy conservation and automation platforms."

KDC intends to develop LonWorks control networking products by offering product development and engineering services under Echelon's LonWorks Independent Developer program. Additionally, KDC plans to join Echelon's Open Systems Alliance program as a network integrator, and establish an Authorized Training Center in Seoul to educate the Korean market about LonWorks based energy solutions, the LonWorks control networking platform, and the Networked Energy Services (NES) smart metering system.

"The Korean market is one of the most advanced in the world with respect to control networking and automation, and we are pleased to work with KDC to further advance both NES energy solutions and the LonWorks platform," said Ken Oshman. "We believe that the breadth of KDC's technical solutions and marketing programs will accelerate the market for both NES smart metering solutions and LonWorks based factory and building automation systems."

About Kolon Data Communication Co., Ltd.

Kolon Data Communication Co., Ltd. (KDC) was founded in 1990 as an affiliate of Kolon Industries, which is ranked among the top 30 Korean companies. KDC has established a solid position as a major IT distributor in Korea by providing customers with the best IT systems and services based upon a nationwide channel network and close relationships with global IT leaders such as IBM, Oracle and Mercury.

KDC, as a leader and an innovator in the business, is advancing toward the next level by adopting brand-new business models. In 2005, it established the first AAP (Authorized Assembler Program- IBM's server/storage assembly system for partners) center in Korea, which drew primary attention in the market. In order to offer advanced environments to its customers, KDC is now focusing on value-added businesses with becoming ubiquitous as the first priority in its plan.

More information about Kolon Data Communication can be found at http://kdc.kolon.com.

About Echelon Corporation

Echelon Corporation (NASDAQ:ELON) is a pioneer and world leader in control networking -- networks that connect machines and other electronic devices -- for the purpose of sensing, monitoring and controlling the world around us. Echelon's LonWorks platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Launched in 2003, Echelon's Networked Energy Services system is an open, extensible, advanced metering infrastructure that can bring benefits to every aspect of a utility's operation, from metering and customer services to distribution operations and value-added business. In 2005 Echelon released the world's first embedded control network infrastructure, the Pyxos(TM) platform, extending the benefits of networking inside machines to the sensors and actuators that make them function.

Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. Further information regarding Echelon can be found at http://www.echelon.com.

Echelon, LonWorks, and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Networked Energy Services Powered by Echelon, NES Powered by Echelon, and Pyxos are trademarks of Echelon Corporation in the US and other countries. Other product or service names mentioned herein are the trademarks of their respective owners.

This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks that Echelon and Kolon Data Communication (KDC) reach agreement on or may not proceed with the planned collaboration or the planned collaboration may not be successful; risks associated with KDC's development of markets for Echelon's products and services and LonWorks based products and services, the growth of the LonWorks industry in Korea, sales targets not being met, development of markets for KDC's products and services, and demand for KDC's products and services; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.