Serving a purpose – our driving force

Olov defended his thesis in 1980 and later became an associate professor, and Lars defended his thesis in 1987. Vitec turns 40 in 2025 and to celebrate, company founders Olov Sandberg and Lars Stenlund have shared how it all began.

The story of how it all began has been told several times. Olov and Lars met at the Department of Physics at Umeå University in the early 1980s and quickly became friends.

“It was pretty easy for me. I just breezed through the classes and I never felt like I had to exert myself. In Lars, I had met someone who also found it pretty easy. I thought, that’s a good guy,” says Olov.

“We’ve had fun since the beginning,” says Lars, “and somewhere in there, everything clicked. Olov is a few years older than me and knew a bit more; he’s always been a bit more familiar with various things in life.”

“We’re good at different things,” says Olov. “So we played to our strengths. And by doing that, we learned a lot from each other.”

The official start of Vitec has been discussed before. One fall day in 1984, Olov and Lars were in line at Snabben, a fast-food restaurant in Umeå University’s Universum student union building, and Olov suggested to Lars that they take up a hobby. As a result, Olov bought a personal computer and Lars taught Olov how to program.

Olov Sandberg received his PhD in experimental physics in 1980 with the thesis “Thermal Properties of Organic Glass Formers Under Pressure.” He was Lars Stenlund’s supervisor when Lars completed his doctorate in 1987 with a thesis on how heat behaves in apartment buildings: “Experimental Studies of Heat Flow and Heat Storage in an Occupied Apartment Building.” Lars’ thesis was inspired by Olov Sandberg’s father’s work to improve building heating efficiency in Kiruna in the 1960s.

While working on Lars’ thesis, Olov and Lars began to develop what would become Vitec’s first software product. Energy had been a major topic since the 1970s energy crisis and the realization that society had to become less dependent on oil was still on the agenda. Olov’s father, Östen, had joined SABO as an energy expert, where he had plenty of space to test his ideas on how to enhance the efficiency of heating buildings.

“My dad pushed us to develop a program to monitor energy consumption. It wasn’t nuclear fission, but more like going from pen and paper to computerization. The program could be used by the people who worked hands-on with the oil boilers,” says Olov.

“We started a limited company, even though it was expensive. We needed SEK 50,000 in share capital, which, as a graduate student, I definitely did not have. A sole proprietorship or partnership would have been a lot cheaper. But the local newspaper wrote about who was starting a company, and for various reasons, that wasn’t something we wanted to advertise at the department,” says Lars.

“Running a company was a bit sensitive at the university. It was impure, in some way,” says Olov.

At that point, they were both still at university. After defending his thesis, Lars got a job at the university. Olov already had a permanent position.

“In practice, I got a teaching position in electronics and microcomputer technology – as an associate professor. But I had always known I wouldn’t be a teacher, so after two years, I took a leave of absence to focus on Vitec. After one year, the director of studies said, ‘The semester starts now.’ And I said, ‘No, not for me.’”

The product and the products that came after were sold to customers as licenses, which meant the customer bought the software product once and then paid for maintenance contracts, for upgrades and bug fixes.

“I had a realization that we shouldn’t sell our products as licenses, but rather as subscriptions. Because customers weren’t prepared to pay for the full cost of development or even for the benefits of our products,” says Olov. “It was better to solve the matter with recurring revenues, so that they paid a little less but for a longer period of time.”

The subscription model gave customers the right to use the product, which the supplier is responsible for keeping up to date. Olov’s idea from 1995 for a new business model based on a software product subscription was essentially a SaaS solution long before the concept had been established.

“When we stopped doing consulting and hardware, we started looking at companies to buy in vertical markets and because we realized that domain knowledge was important for success, we started in the real estate and energy industries,” says Lars.

Focusing on verticals also meant that Vitec would need to target several different markets to generate growth. Each individual vertical was too small on its own to allow for significant expansion. But Lars realized that regardless of vertical, businesses often face similar challenges, which opened up a fair amount of possible acquisition targets.

“Management’s analysis at that time, and which still applies today, is that there is much more that unites vertical software companies than divides them. Regardless of customer industry, the business-critical issues are the same. How should support be managed? How are sales developed? How should the accounts look? And how conflicts are handled between different professional roles,” says Lars Stenlund. Or, as Lars put it,

While there is a great deal of satisfaction in creating a successful company that expands into new business areas and geographic markets, something else brings greater satisfaction to the two founders.

Success, growth, continuous improvement, but above all, serving a purpose – this is the basis of Vitec’s success, for the first 40 years. And the journey continues.