HPE pays $1.3b for Kiwi David Hughes' Silver Peak

David Hughes. Photo / Supplied

He's one of the most successful New Zealanders on the global technology scene - and you've probably never heard of him.

David Hughes - the media-shy founder and chairman of Silicon Valley-based Silver Peak - has sold his networking company to Hewlett Packard Enterprise for US$925 million ($1.3 billion) in a deal that closed on September 21.

Hughes declined to say what percentage of Silver Peak he owned at the time of the sale, but did confirm he'll join HP as part of the deal, serving as senior vice-president of the US giant's WAN [wide-area network] business within its Aruba network, which competes head-to-head with Cisco.

Although he's spent all of his working life overseas, Hughes was born and raised in Auckland, where he told podcaster Paul Spain that he initially wanted to be an architect before falling in love with the computer of the time - the TRS-80 and Apple II when he was 12.

By age 14, he had taught himself programming and took it upon himself to contact companies who had advertised full-time programming roles, and asking them for part-time work. He soon had a jam-packed portfolio of clients, including a maker of building management systems and an electronic sign maker.

"It certainly paid better than my paper run," he said.

After completing an electrical engineering degree at the University of Auckland, Hughes was awarded a scholarship that took him to the University of Wollongong, where three years later he gained a PhD in Philosophy - and immediately had telecommunications networking job offers in Australia, Canada and Japan.

He initially snubbed the Japan offer, thinking he had no facility for languages but, after a second approach, he decided to push himself out of his comfort zone and ended up working in Tokyo for three years in the early 90s.

He then moved to Silicon Valley, working for Stracom then Cisco before becoming entrepreneur in residence at legendary venture capital outfit Benchmark Capital from June 2003 to June 2004 - and it was Benchmark which bankrolled Hughes as he set up Silver Peak with US$63m in capital.

In a Wall Street Journal interview during Silver Peak's early days, Hughes told the paper that "We focus on the scale problem."

He had become convinced years ago that data volume was going up faster than bandwidth, or the speed at which it could be moved. Indeed, data centres operators, lacking the bandwidth to move large amounts of data between data centres, often send physical backup tapes by courier instead.

Silver Peak became one of the pioneers of "software-defined networking" or using smarter software management to speed the movement of large amounts of data over hardware pipes, and streamline the way it's managed across wide-area networks.

The privately-held company has never released financials, but the size of HP's buyout offer indicates it was generating a good few paper-runs worth of profit.