From “Gauja” to hybrid work – how the Latvian IT company “Capital” is changing

There is hardly anyone who has not heard about the Latvian full-service IT company “Capital”, founded way back in 1992. All these years, the company has been an important player in the IT environment of Latvia, so it is natural that the associations about “Capital” are different. For some, it is associated with “Apple”, whose manufactured equipment the company also sells, for others – with the legendary “Gauja” portable computers. Some recognize this company by the retail stores “Capital”, others associate it with high-quality and reliable service.

Times are changing, the IT field is transforming as fast as ever, and this encourages “Capital” to change with the times as well. Currently, the company satisfies the new needs of its customers for equipment suitable for hybrid work and the ever-increasing desire to receive individually tailored IT services. What the company offers, how to maintain competitiveness for 30 years and what trends can be observed in the field of technology, Aigars Bērziņš, a member of the board of “Capital”, reveals in this conversation.

To be one step ahead of what is happening

Describing “Capital”, A. Bērziņš points out that the company tries to be very flexible, keep up with the times and adapt to the ever-changing world. Despite the rapid growth, which has not been hindered by crises, the company tries to preserve the values ​​that have been important since its inception: dynamism and flexibility. “Capital” employees are constantly learning in order to be able to offer clients the most modern solutions. “In order to keep up with the times, there must be a goal to overtake them. If we want to go only with the times, then we will always lag behind in our development,” believes A. Bērziņš. With this idea, the company has been operating for years, during which it has allowed changes both in the range of services and in the business as a whole.

Focus on the Latvian customer

From the very beginning, the target market of “Capital” is Latvia and Latvian clients, but nowadays it also means work in foreign countries. For example, if the client has decided to start operations abroad, “Capital” “goes along with it” as far as possible and helps to grow outside of Latvia as well. This allows the client to devote more time to learning the new market, while “Capital” takes care of providing the necessary IT services and provides the necessary equipment.

Work, communication and safety are in focus

“Capital” mainly focuses on business clients, state institutions and municipalities. A. Bērziņš explains that the requirements of legal clients are significantly higher. When working with these customers, it is necessary to get to know their needs, business model, specifics, wishes both in connection with the choice of equipment and the creation of IT infrastructure. This is about both equipment used by employees and systems needed in the company’s server room.

However, private clients also benefit from the focus on business clients – created to meet the demands of corporate clients, “Capital” provides high-level service to individual clients as well. “Capital” is proud of its large team of approximately 70 employees, which is considered the most powerful in Latvia: programmers and project managers, customer managers and IT infrastructure specialists. Thus, it is possible to provide every customer with professional advice, help to find the most suitable equipment and solve problems quickly.

A full-service IT company means that “Capital” offers its customers both equipment from the world’s most recognized manufacturers, IT systems and infrastructure design and equipment production, as well as service and maintenance. The IT industry currently focuses on the three most important needs of users: productive work, convenient communication and perfect security, and it is in these areas that “Capital” has accumulated the most experience, admits A. Bērziņš.

A turning point in 2017

Five years ago, Capital made a decision to introduce significant changes in its business. In order to continue growth, the company abandoned retail sales. “Capital” stores used to be one of the company’s hallmarks. A. Bērziņš says that little by little the network of “Capital” stores grew up to eight retail outlets.

Until 2017, “Capital” developed the retail direction in parallel with the basic business, which was serving B2B customers, as well as the state and local government sectors. In addition, the company offered equipment repair. A lot of resources had to be invested in all these directions, and at one point it became clear that there are too many priorities and something needs to be given up. “2017 year came with the fact that e-commerce increasingly dominated, especially in the segment of IT equipment. People started shopping online more often, the number of purchases on our website also increased significantly,” recalls A. Bērziņš. Considering this and the fact that it is impossible to focus on many things at the same time, a decision was made to further develop “Capital” without active retail sales. The company reoriented most of its resources to B2B and the public sector. Judging by the financial data, it was the right move – the turnover of “Capital” reached 37 million euros last year, increasing by 6.6% during the year.

As the purchase of IT equipment is increasingly moving online, it is worth investing in the most convenient online customer experience. Therefore, this year “Capital” plans to renew its website, investing in it an impressive amount for a local capital company – 200 thousand euros. Aigars Bērziņš says that the new website will be more modern, better quality, more informative. “Nowadays, the IT field is the blood circulation system for the operation of any company, therefore the daily consumption of basic IT equipment and accessories has significantly increased. Taking this into account, the creation of a new website was a logical step,” emphasizes the representative of “Capital”. On the improved website, customers will have the opportunity to view products in one place and compare them without having to visit the pages of several manufacturers, and there will be about a hundred times more products available than the previous one – from 30 different suppliers.

The new website is specially designed for the needs of business customers: with one username, customers will be able to manage the accounts of several companies, evaluate the price and delivery time, choose the delivery warehouse, as well as authorize other persons to receive orders. Order processing will become more efficient so that customers receive the necessary equipment as quickly as possible.

With the portable computer, “Gauja” announced competition to the big giants

For many in Latvia, “Capital” is still reminiscent of the “Gauja” brand – home-made portable computers that “Capital” started producing in 2005. At that time, portable computers experienced rapid development, gradually became more and more affordable, and this significantly contributed to the demand for them both among individuals and companies. Major electronics manufacturers such as Dell and HP were unable to keep up with this demand and were not as flexible in terms of device variety. This gave good opportunities for the development of small electronics manufacturers, who offered equipment in a smaller volume, but of the same quality and generally more attractive to the buyer.

This is how the “Gauja” line of “Capital” portable computers entered the Latvian market. Since the market was not large, the company was able to offer computers in different colors and configurations in terms of disk, RAM and processor, thereby giving serious competition to the big tech giants. “Capital” was responsible for the selection of models and colors, installed processors, memory cards, disks, software in the company’s premises in Riga, as well as tested the finished products.

However, around 2008, the leading electronics manufacturers were already able to adapt to the demand for a greater variety of portable computer models. The advantages of “Gauja” gradually decreased, and in 2013 the production of computers was completely stopped. True, this line of computers was not the only one that “Capital” worked on. The company has been producing stationary computers “Neo” for both business and computer game fans since the very beginning.

Are desktop computers in decline?

Speaking more broadly about stationary computers, A. Bērziņš points out some trends that can be observed in this field. First, desktop computers as a product category are in decline. At the same time, there are areas where they are still very necessary, so they continue their development. For example, manufacturing requires powerful computers that can process large data sets.

Secondly, a growing product category in the segment of classic stationary computers is gaming computers. An important trend appears here – when buying a gaming computer, buyers no longer look as much at the price-performance ratio as they did 10-15 years ago. Consumers are more interested in, for example, specific components, such as a water-cooled power supply unit. “It can be seen that the customer puts emotions into his purchase and thinks less about the practical side,” assesses the representative of “Capital”.

A. Bērziņš draws attention to the fact that there is a great diversity in the market of computer components, which can cause problems for the uninitiated. He emphasizes that when buying each component separately, the customer can often get burned if one of the desired parts does not fit or is not compatible. So that such problems do not arise, “Capital” goes through the entire cycle instead of the customer and offers already assembled gaming computers. Before they are approved for production, they are made in a small series and are thoroughly tested by Capital specialists. This allows you to understand what the production process will be like and whether the final product will meet market requirements.

The pandemic has changed the relationship with technology

The time of the pandemic created huge challenges for almost all companies that had to adapt to a new work rhythm. One striking thing that Capital observed was the change in employees’ relationship with and use of technology. For example, the devices used in the office had to be used at home as well, when working remotely. “Mobility has come with productivity challenges. The challenge for the employees was to ensure a productive work environment at home, although under normal circumstances, an effective work environment is exactly the task of the employer,” says the representative of “Capital”.

During the pandemic, the total amount of equipment needed to implement work processes increased rapidly, and with it, the demand for efficient systems capable of storing and processing information also increased. As a result, in 2022, servers and network equipment became the most popular “Capital” product category, the demand for them increased by 44%. In order to keep up with this growth, “Capital” hired additional specialists and started cooperation with SIA “Mikrotīkls” and several other rapidly growing IT infrastructure manufacturing companies.

During the pandemic, working from home was a necessity, but now hybrid work, combining working in the office and at home, is a choice and privilege for many, which employees do not want to give up. This also means new requirements for the equipment intended for work – it must be powerful, mobile, secure against attacks and physically durable.

The big future trend is also the transition from the purchase of individual IT equipment units to the purchase of complex IT services. “Companies and also state and local government institutions are increasingly aware that doing everything from scratch by themselves is unprofitable and inefficient. This requires a level of expertise that is difficult to achieve in a small organization. Instead, business customers are increasingly choosing “packages” – equipment together with its service and infrastructure maintenance,” says A. Bērziņš. It is this segment that “Capital” plans to develop in the coming years, emphasizing that in reality, clients from IT companies have always wanted to receive not a specific hardware, but a solution to their problem.