Dell at Dreamforce: Brave the economy or prepare for the rebound?

Michael Dell, the founder and CEO of Dell Inc., made an interesting observation during a brief appearance on the main stage at the Dreamforce conference. Today’s headlines tell us that, around the globe, things are slowing down – the economy, IT spending, investments in new technology and so on. But not everything is slowing, he said as statistics flashed across the screen behind him. Thousands of people log on to the Internet for the first time every day. By 2011, the amount of data being transmitted is expected to reach 1.8 zettabytes (for those doing the math, that’s 1 billion terabytes.) And energy consumption is expected to grow by 76 percent by 2010.

The pressures of Wall Street can force companies to cut costs and Dell is no exception. The company has largely met the goal of reducing its workforce by 10 percent but more cuts may be coming. No, Michael Dell didn’t discuss his company’s cutbacks at Dreamforce. But he did talk about ways that Dell is also positioning itself to be ready for an economic rebound.

Companies have to do more than just look at how to trim expenses, he said. If a company is just looking for a 10 percent improvement to the bottom line, the cuts will be the same as they always have been (staffing, equipment and so on.). But, if companies call for something more drastic – a 50 percent improvement, for example – there can be no status quo. Brilliant minds will have to rethink the entire business process and figure out how they can not only operate more efficiently but also position themselves for the future.

Here’s the thing: Dell has discovered that, sometimes, the best ideas don’t necessarily come from executive or managerial ranks. Sometimes, it’s the employees, those who work on the front lines with customers every day, who come up with some the best ideas. Even further, the idea that generates a million new customers while saving a million dollars might not even come from someone on payroll – it may come from a customer, a partner or a random Joe the Developer.

Dell, like others, has jumped feet first into the world of social media and community. Last year, it launched Ideastorm, a Web-based suggestion box that was opened to the public and has received more than 10,000 ideas – about 200 of which have already been implemented. It has since segmented into Partnerstorm (a forum for Dell’s business partners) and Employeestorm. (Can you guess who gets to chime in there?) It has blogs written in 7 languages and has launched a video marketing campaign, called Digital Nomads, that is less about Dell – the brand – and more about ways that people use Dell products in everyday work and play. Launching a social network strategy – whether it be Twitter feeds, blogs in multiple languages, viral videos or Facebook fan pages – doesn’t have to be expensive. Yes, they can be labor intensive, but there’s no reason for the company to buy new software or hardware – so many of those tools are available for free (for now) on the Internet, err, in the cloud.

One of the things to remember about launching new, unconventional strategies is that it’s all still a learning game. Dell says it’s not watching competitors to see what they’re doing. Instead, they’re watching the startups, looking for ideas that are disrupting other business models. A year or so ago, Twitter was a microblogging site that allowed people to give us inside peeks into their lives. Today, it’s a platform that allows companies to announce new products or services while also serving as a forum for media outlets like CNN to gauge the reactions to news by real people, in real time.

On the economic front, a slowdown is forcing businesses to make tough decisions about cutbacks. But on the technology side, things are moving faster than ever. Companies willing to take a chance on new technologies today – whether it’s virtualization, cloud computing or social media - could very well be positioned to be leaders when the economy finally does bounce back.

Other Dreamforce coverage:

• Salesforce partners with Facebook, Amazon to spark more app development
• Dreamforce: Taking SaaS and the cloud in new (and old) directions
• SaaS battlegrounds: Salesforce v Zoho
• DreamForce clouds deluge San Francisco
• Salesforce.com 'gets' enterprise blogging
• Facebook, Salesforce.com aim to create common developer network
• Can Force.com help consolidate your web tier?
• Benioff launches Sites