Capital Gains

Last updated on May 13th, 2019 at 02:36 pm

When a company changes both its philosophy and direction, it can encounter uncertain and often dangerous waters. However, Milwaukee-based Capital Data Inc. decided to do just that last year, shifting from a sales and transaction focus to a new company with a new modus operandi: "Your Partner. Your Solution."

The result? The company nearly doubled its revenue to $19 million.

"Our mission is to be a trusted advisor to customers and to offer solutions to customers as opposed to just offering products," said John Steindorf, president of Capital Data.

Since the company was established 17 years ago, Capital Data has been an information technology (IT) hardware reseller and equipment leasing agency with a small focus on professional services.

Capital Data has added specialties to its professional services division, including data storage and consolidation solutions, data protection and recovery solutions, e-mail archiving and compliance solutions, high availability solutions, disaster recovery and business continuity solutions and data security solutions.

"If we wanted growth, we had to change our focus from a hardware provider to a solution provider to distinguish ourselves in the market," Steindorf said.

"We are not experts in everything," Steindorf said. "With the solutions and architecture, we lay out what the customer should do and define Capital Data’s role in that solution."

The company plans continued growth in 2006 with a goal of reaching $25 million in revenue and plans to acquire a company in Minneapolis to expand its geographic reach, Steindorf said.

Capital Data started 2005 with a newly opened Chicago area office in Des Plaines, Ill., and a new outlook on the IT industry.

A combination of trying to break into the Chicago market and suggestions from existing customers led Capital Data to change its vision, Steindorf said. The company spent most of 2005 focusing on long-term relationships with partners and clients, having a larger presence in the community and changing its reputation in the marketplace.

"It is not about the immediate sale anymore," Steindorf said. "Now we want to deliver interesting content and in doing so, elevate people’s perception of what Capital Data can provide for them and who Capital Data is."

Capital Data began offering lunch-and-learn opportunities to clients and potential clients that were more than just explaining a new product, as the company had done in the past, Steindorf said.

The company grew and emphasized its professional services division to better serve customers and to create longer-term and more personal relationships. The firm now provides free assessments and consultations to potential clients and only begins to receive payment if the potential client becomes a customer.

Capital Data will offer the services of its strategic partners for expertise in parts of a solution that the company cannot personally offer, Steindorf said.

Capital Data introduced itself to the Chicago-area technology community by joining organizations, attending networking events and by focusing on bringing in partners and making sales based on partner relationships.

Capital Data added clients including the Chicago Transit Authority and the Chicago office of Fidelity Investments Institutional Services Co. Inc., headquartered in Boston.

The Des Plaines office produced 25 percent of the additional $9 million in revenue that Capital Data achieved in 2005, Steindorf said. Leasing services contributed 30 percent of the revenue increase and professional services contributed to 25 percent, Steindorf said.

Building strategic partnerships allowed for a significant boost in sales and client contacts in the Chicago area, Steindorf said. And both the partnerships and the networking strategies were brought back into Wisconsin, he said.

Capital Data joined the Illinois Technology Association (ITA) and will now participate in its sister organization, the Information Technology Association of Wisconsin (ITAWi), which launched in Madison in January.

Capital Data offers discounted leasing and service programs to members of the organizations who are starting a company or having funding trouble getting the company off the ground, Steindorf said.

"Instead of spending time cold-calling and running around, we decided that trade organizations and professional services organizations and calling on people we thought we could partner with would be more successful," Steindorf said.

With partnerships, Capital Data and the partnering company call on a potential client together. In many cases, Capital Data accompanied partnering companies on their prospects and received business as part of their deals, Steindorf said.

Capital Data is currently returning the favor in the Wisconsin market, where it is introducing Chicago area vendors and service providers to Wisconsin companies.

Local partners include Norlight Telecommunications Inc. in Brookfield and SecurePipe Inc., which is based in Lincolnshire, Ill. with multiple Wisconsin locations.

"We have broadened our perspective on who we should be doing business with and accepted that our business information is not proprietary, so when it is appropriate, why not share?" Steindorf said.

The revenue growth enabled Capital Data to hire eight full-time employees in 2005, expanding its workforce to 18 people.

Continued growth in 2006 will be through professional services vendor and partner relationships, Steindorf said. Capital Data hopes to generate more leasing business through its wholesale and new and used equipment divisions, he said.

"The biggest challenge for us is that we have been in business for 17 years and a lot of people have the same impression with us today as they did when we started the business," Steindorf said. "We want to have a more comprehensive vision and deeper relationships with individuals."

Capital Data Inc.

  • Founded: 1989
  • President: John Steindorf
  • Headquarters: 310 E. Buffalo St., Milwaukee
  • Other locations: 2800 S. River Dr., Des Plaines, Ill.
  • Revenue: $19 million
  • Employees: 18
  • Web site: www.capital-data.com

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