>> rose: welcome to the program. tonight, we begin with mark carney. he is the governor of the bank of england. >> we need to provide a lot of still throws the u.k. economy. we've got big head winds from europe, from the currency, from ongoing deleveraging from households, we need to provide a lot of stimulus. but that stimulus can create risk. you mentioned the housing market, that's one example. we need to take other steps in order to reduce those risks. manage those risks, mitigate those risks and if we -- because if we don't we're going to create bigger problems down the road or we're going to have to pull back too soon on monetary policy which is the last thing we want to do. >> rose: we conclude with michael dell who just completed taking his company private. >> what i will say is that i'm very proud that during the time our company was public our stock

appreciated over 13,500%, which was 27 times the amount of the s&p 500 during that same period. so, yeah, we missed something. everybody misses some things but we built one heck of a business. it's still one heck of a business and now it's growing at double digit rates and we're investing for the future and able to invest, be bold, focus on our customers, innovate, invest in r&d, couldn't be more excited to be a private company once again. >> rose: mark carney and michael dell next.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> the m.p.c. intends at a minimum to maintain the currently exceptionally accommodative stance of monetary policy until economic slack has been substantially reduced, provided by that this does not put at risk either price stability or financial stability. >> rose: mark carney is here. he has been governor of the bank of england since july of this year. he was previously governor of the bank of canada. he's the first non-brit to take on the role. he succeeded sir mervin king. the economy has avoided a triple dip recession and is showing signs of recovery. he gave a speech at the economic club of new york in which he said he anticipated the economy to fulfill the hopes and dreams of the holiday season. in the u.s., the latest

unemployment numbers have led to some speculation of a tapering by the federal reserve's bond-buying program. i am pleased to have mark carney at this table for the first time. welcome. >> thank you very much. >> rose: pleasure to have you here. >> pleasure to be here. >> rose: let me start with canada and what canada went through. tell me what it was about that experience that's instructive for all of us. >> i think there are two things. first, on the financial side. we had an advantage in that we saw very early on some of the worst excesses of the shadow banking system. so we had deep problems in a little corner of the canadian market called the nonbank commercial paper market. and that little corner, sleepy little corner, $20 billion canadian of assets that supported ultimately a structure of leverage that exceeded $250 billion u.s. we saw that early on because we have -- it was one of the most

egregious examples and we realized the scale of leverage in the system and that was the fall of 2007 and that made us move quicker than some others whose systems were a little more resilient at that point and thought maybe the problems would go away. so we had that advantage. that was instructive in terms of how much leverage you can get through a chain in the system. so it's not just the commercial paper. you've got to combine it with structured products and combine those with credit derivatives and other aspects. the second thing i would say is -- and that's very complex message, it took me about five minutes to explain that. the other thing we, i think, contribute is that we had very -- some very simple regulations, a leverage ratio. a very simple test, how many assets did you have relative to capital? and that helped save the core of our system from the worst excesses that were seen in the u.s. and it has to be said the u.k. >> rose: but a significant part of this is recognition that

came from the sense that you were able to have a measurement of where you were and you had some understanding of what leverage was doing. >> exactly. recognition -- a good line of sight to how much leverage is in the system and once you see that, once you recognize it, you have to move quickly and that's been the lesson whether it was what tim geithner and this administration did with the u.s. banks, what mervin king and the u.k. authorities did in advance of my arriving. i'll be clear, i'll give credit where credit's due, in advance of my arriving to put 140 billion pounds in private money to recapitalize the system. >> rose: in a speech you said "a recovery may be gaining pace but our economies are a long way from normal. five years after the crisis, take a look at where you think we are." >> well, i think we're -- it's really just beginning, the true recovery is beginning. because the core of the systems are repaired, as i just said. but we have not yet seen

businesses really starting to invest, really starting to believe in these recoveries. businesses recognize they can get -- the bigger businesses particularly, lots of access to capital at very competitive rates. i think the concerns of dramatic events-- whether from europe or certainly from the financial system-- those concerns have ebbed markedly. so there's not those uncertainties. and the uncertainties really are about the future of demand. where is it going to come? is it going to be robust or can i wait another quarter? another quarter? another quarter? or do i need to act now? and so this is the start of when we will need to see business investment going forward and it reflects back on what's happening in the global economy, the regulatory response, these other factors will influence those day to day decisions. i tried to in the spirit of the season, as you referenced, to be a little more positive about the

near-term outlook and i feel pretty comfortable about the near-term outlook. but the longer term outlook will turn on the bigger questions of business investment, what happens to productivity, what happens to the so calmed supply-side of our economies. >> rose: where do you see demand going over the next several years? >> well, there's still big head winds. households are still right-sizing their balance sheets. they're saving a lot more than they were before. if you look at the u.k. situation, what we don't have -- we haven't had that productivity growth that you need to get real wages growing. so we've had a pretty sharp pickup in the last several months but it's because households have moved away from having extreme levels of precautionary savings and moved down to normal levels and as a consequence they've been consuming and things have been moving. but that only precedes if incomes start to grow in subsequent years. so you have that aspect in the advanced economies. as you're well aware, i know, in a series of emerging markets you have some years of adjustment,

one or two more years of adjustment. whether it's india, indonesia, things like that. so that's continuing to temper export demand for the u.s., for the u.k. and the european situation is vastly improved in terms of the risk. but the dynamism is not yet there. and the die phamism won't be there, won't even begin to appear until the work the e.c.b. is doing on fixing the banking system over the course of the next year is completed. >> rose: you think they can do that? >> without question they need to do that and they fully recognize it. >> rose: right. >> and that certainty, i think, will ensuring that they do it. but it is a long process. this is not an approach similar to what the u.s. did which was effectively rough justice over a three-month period and then recapitalization which helped turn things around. this will be a much more methodical process that is already under way.

>> rose: and on the supply-side? >> well, on the supply-side this is the big question. how much permanent damage has been done to productivity? to the potential of our economies? how many workers have been out of work long enough that they've lost the skills, the attachment to labor, which are real issues. i'll say one thing, that the two are linked, whether it's the federal reserve or the bank of england, we both see that this adds impetus to giving stimulus now to get people back into work as quickly as possible, to encourage businesses to invest as quickly as possible or else we will see some debt cement on the supply-side. that's normally not the way central banks talk about these things but we think that's the case. to a limited extent we have a catalytic role, but the supply-side issues i think the biggest supply-side issue-- and i would say this even more strongly sitting in london given how open the british economy is, given london's role as a global financial center-- i think the core supply-side issue is

maintaining an open global economy, whether it's on the financial side, whether it's on the trade side. and what is needed to build the confidence from -- you know, from jakarta to japan to jacksonville, any of those centers that this system is going to be there and it will be there for a while. >> rose: we slipped over in terms of talking about the u.k. and i want to. what's happening to u.k. mortgage market? >> well, it's -- if you look at that mortgage market today versus where it was in 2007, precrisis, it's rock solid. back in 2007/2008, at that point 60% of the mortgages you put less than 10% down on a house. now 85% of mortgages are the other way. you have to put a lot more down on houses. the underwriting standards have improved dramatically. but this is a housing market that is still relatively firmly valued, let's put it that way. not just in london.

more broadly around the country. relative to incomes and relative to historic levels and where it's starting to pick up again and within the context of households that have paid down 30% of debt over the last five years, so that's good but they still have a fair amount of debt relative to income. more debt relative to their income than american households. so you look at that situation and you say, okay, there's some welcome recovery in the u.k. housing market, but let's be prudent, let's act early, let's ensuring that it continues to evolve in a constructive way so we at the bank of england have taken some steps to help. >> rose: in fact, you said five simple words to describe our approach: we were open for business. >> okay, so one of the fundamental lessons we've taken from the financial crisis and where the world needs to get to to be -- have a more resilient financial system is we need more resilient financial markets. certainly we need to fix the

banks and end to big too fail and we can talk about that if you want. but we need financial markets -- >> rose: to be more resilient. >> more resilient. so they're more like the equity market. we didn't like the prices of equities in the fall of 2008 but we can always get a price. you can always transact. you couldn't transact in the global derivatives market. you couldn't transact if you were trying to borrow short term. these are trillion -- tens of trillion dollar markets that shut and brought the system down. so those markets are viewed fundamentally reformed and this is where the central bank comes in is part of those reforms are the importance of collateral. people aren't taking naked exposure to each other. "i will lend you money if you give me securities or something else as collateral." there are huge markets that are going to develop in the use of collateral. the central bank is not just a lender of last resort, we think, in the future to an institution. the traditional role that the bank of england really founded. but it's also the lender of last

resort to those markets so that those collateral markets keep functioning so the derivative market keeps functioning so the bank funding market keeps functioning so the system keeps functioning when the next shock comes, which it inevitably will. so we're open for business because we understand that we have a continuing role to keep those markets functioning so the system as a whole is more resilient. >> rose: i hear you on resilient financial markets. what are the lessons for monetary policy? >> from -- from -- well, i think the very simple one is that monetary policy got itself into a cul-de-sac where it didn't take seriously financial markets. i mean, financial systems weren't in the models. there was down playing of the importance of asset prices or credit dynamics for economic growth, for the risk to the system and it was a down playing as well in terms or in -- really ignoring the interactions

between monetary policy and how financial markets behaved. so certain stances of policy encouraged extreme behavior. and i think the lesson we've taken at the bank of england, u.k. -- british authorities more broadly what they've taken in reforming the bank of england has been that you need monetary policy and, in a complementary way, macroprudential policy in order to ensuring that -- in setting -- i'll take today as an example. we need to provide a lot of stimulus to the u.k. economy. we have big head winds from europe, from the currency, from ongoing deleveraging, from households. we need to provide a lot of stimulus. but that stimulus can create risk. you mentioned the housing market, that's one example. we need to take other steps in order to reduce those risks, manage those risks, mitigate those risks and if we -- because if we don't we're going to create bigger problems down the road or we're going to have to pull back too soon on monetary policy, which is the last thing

we want to do. >> rose: and what are the steps we ought to take? >> well, to reinforce underwriting standards. and there's a variety of ways where we could adjust the terms under which people can get mortgages if we had to. we could ask banks to put more capital behind every mortgage they give. not necessarily just because of the risk of default but because of the broader economy wide effects. for example, housing boom and bust could have. so we have measures that we could do. and it's just like monetary policy. if you do smaller things early enough you don't have to do the really big things later on. so there's an element of anticipation there, and that's what we've tried to do in the u.k. >> rose: what's your take on what's happening in japan? >> what's happening in japan is the product of years of the challenge that i was really talking about today. effectively a liquidity trap. >> rose: right. >> and an inability to get real interest rates down quickly enough and have a

well-functioning financial system that transmits that to the broader economy. so they here in a position where you get by -- with the wisdom of hindsight, you know, it's always easy. >> rose: 20/20. >> yeah, 20/20. by not taking the big steps early enough they're having to take really big steps now. and i think as we all recognize the third arrow is absolutely crucial because ultimately when we really talk about creating wealth, for the steps we're taking -- this is a common theme whether it's u.k., u.s., europe, japan. we can take steps today-- and we have, the central banks-- to pull forward demand to keep our economies going, right? we lower the cost of interest, that's what it does. that works, ultimately, if incomes grow in the future. and it's the same whether it's a small move here or a big move in japan and so the measures that they need to take and the so-called third arrow are absolutely fundamental or else there won't be the growth of incomes in the future because of

productivity and exports and other things. and in their absence they'll have to pull forward even more demand. in the words of -- again, my predecessor, you know, tomorrow becomes yesterday. and you still have to fill in that hole of demand. so it's -- it's absolutely instructive, i'll finish with this. it's instructive for all of us in terms of the importance of having coherent policy now and being appropriately aggressive. >> rose: when you and other central bankers from china to europe to latin america look at the united states, what concerns you? >> well -- >> rose: about the management of the economy. and is it mostly the political will to do things that many people know is necessary? >> i think -- i think it's fair to say-- and i always hesitate to comment on other people's politics-- but it is widely acknowledged i think here as well as in central banking

circles that a series of decisions on the fiscal side, a series of short-term steps and incentives -- >> rose: as they say kicking the can down the road. >> but in the worst of all sense of the word because we've just gone through 2013, another disappointing year, as i said in my speech today, with huge fiscal drag, almost two percentage points of g.d.p. >> rose: yeah. >> that doesn't do anything to fix the longer term fiscal problems, entitlement and other problems in the united states. so you got a lot of the pain without any of the long-term gain. it will be less of that next year but still some big, tough decisions. so what concerns us the most is the system can create very difficult short-term situations without the longer-term benefits. so last point, you can look at europe and, you know, extremely difficult situations in italy and spain and other places but in part occasioned by taking big

tough longer term reforms. that's a more realistic tradeoff. >> rose: what gives you pause? as a central banker who's looked at and know of the relationship between economies, what is it that worries mark carney? >> well, i worry about a couple things and i'm paid to worry so i'll step out from the u.k. issues and look more broadly at your question. first thing, i worry about us finishing this global financial reform. and i worry about it. one i worry because of the risk that would still exist if we don't finish the job but secondly i worry in its absence we'll end up with a much more fragmented system on the financial side and that will lead to associated fragmentation with respect to global commerce and we will undo many of the benefits of globalization. so i i worry about that. i think the challenges the

chinese authorities face are considerable. they are the product of tremendous success. they always were going to face these issues in terms of rebalancing the economy. but the -- getting the sequencing right, getting the magnitudes right will be extremely -- will be challenging. and it relates back to the first point which is that we need to take steps that assist in this rebalancing and we need to also have the patience to recognize that timetable that's right for china may not perfectly fit for the timetable that's right for son-in-law of -- advanced economies looking to rebalance. i'll give you one small example, if i may, which is technocratic but important is we're looking at -- to have a ren minute bitrading hub. and part of the reason we're looking to do that, it's a traditional role for london but internationalization of the ren men by is in china's interest.

so those are the two things i worry about. i do share medium to longer term concerns of others about europe. ren minute by. and what ultimately will be needed to build the institutions to ensuring the euro is as viable and resilient as it needs to be. and the timetable -- the economic timetable and the political timetable which rarely coincide in and the difficulty of doing that. >> rose: how do you see where george osbourne and david cameron -- what they have been able to do with the economy and you, too. >> i think what's happened in the u.k. is some very tough decisions were taken over the course of the last few years.

but with respect to the banks particularly, mervin and others went back to the system and said "you don't have enough capital you've raised a bunch and your numbers look good but they're not good enough. we're seeing the benefit of that i think by retaining their commitment to openness opennesse authorities have helped make a difference and what is -- because, remember, this economy that the labor market has -- is very flexible, particularly in a european context incredibly flexible and if anything it's become more flexible since the crisis, which is unusual. and part of the consequence of that, in our view, has been that a session that has been bad enough that the unemployment rate "should be"-- only an economist speaks in these term terms-- 14% is 7.4% today. so by ticking to the first principles around a series of these issues it has made a

difference. >> rose: there's debate between growth and austerity. was that just a gross oversimplification of what politics allowed? >> well, i think the rhetoric in that debate was seldom -- quite often didn't match what was happening so the scale of austerity in the united states in the last year has dwarfed anything in europe. and, in fact, the scale of austerity in europe next year will be less than 1% for the eurozone as a hole in terms of the overall level of fiscal drag but you wouldn't knee from the way it's depicted. you wouldn't necessary have known it by the way the u.k. was compared to the u.s. as well. ultimately macro policy-- whether it's monetary orifice cal-- can play a role in extreme

circumstances. lead to fiscal authorities to decide when they should take bigger steps, it's really their responsibility. but when you think about longer term, medium to longer-term growth it's not going to come from monetary orifice cal policy. you have to get those fundamental rights. it will come from a host of other supply-side policies. one of the points i was trying to make today is yes there are issues in the short term where we have to play these roles. but if you're really concerned about the supply-side, if you're really concerned about productivity growth and potential growth, it's not a game for the central banks. it's not a game in terms of the budget. these are fundamental issues in terms of education, infrastructure, in terms of trade, financial reform. these bigger, tougher issues that you can't distill into a soundbite or 30 second explanation and you actually is to execute year after year after year. >> rose: i know you didn't come over here to give janet

yellen advice. >> she doesn't need it. >> rose: is it time for tapering? (laughs) >> charlie, i didn't come here to give janet yellen advice. i'm very confident that between janet and bill and the other members of the f.o.m.c. they'll take the right decisions. i mean, the u.s. -- they have flexibility in terms of -- you know, they have multiple instruments that are moving, both asset purchases and the guidance on the short rates and we'll leave it to them to -- we'll watch -- we'll be very interested in the results of their deliberations. >> rose: and promoting growth what are the tools that are available? >> well, i start from ensuring that we've got a proper open global economy. i think within that absence we will move into a low growth environment. >> rose: so from your college experience what was more important? what you learned playing hockey

or studying economics? >> i sat on the bench a lot playing hockey so i have to say that, truth be told. i probably learned -- i didn't learn much playing hockey there the great advantage of that system, the american liberal arts college system is that mixture of the technical with the liberal arts element of it because you need this this world both legs. >> rose: you really do. i totally agree. it's almost like we're shifting away from an appreciation of what the liberal arts does for you. >> i entirely agree. i agree the challenge in educational attainment, and i tell my children this you want to stay with math and statistics and other things, even if you don't like it, for as long as possible because that -- the discipline of that thinking will

help inform broader decisions. but just as -- and i saw you talked about this a few weeks ago, just as i'm not sure you'd have the nobel prize without shiller or you'd be successful in markets without the two i think you do need both to take full advantage and to have actual human progress. >> rose: thank you very much. it's a pleasure to have you on this. i hope we can do this again as we watch what's happening. it is obviously a crucial time and not because we went through what we went through in 2007 and 2008. because we went through that people are asking have we done you have no avoid that. >> rose: and have we done enough? no, we've gone a long way on financial reform. we haven't done enough there. and on the bigger questions we're not talking about them enough because -- i mean, it's very good of you to have me on your show but i want a world where you don't want me on your

show. >> rose: (laughs) >> that should be our objective. >> rose: thank you. >> thank you very much, charlie. >> back in a moment. stay with us. >> this is really all about modernizing the technology environment. our industry is moving from one way of doing things to a new way of doing things. it could be modernizing the applications, moving off of a mainframe, helping a customer embrace a cloud. dell has done thousands of mainframe migrations, moving hundreds of millions of lines of code. any still on z-series mainframes, we're the folks to call to help you get off of that. >> rose: michael dell is the founder and c.e.o. of dell incorporated. the company revolutionized the production and distribution of personal computers. at the time of the i.p.o. in 1988 michael dell was 23 years old. earlier this year he announced he was taking his corporation private. it is the largest company in history to do that. the deal had its opponents, however, leading "forbes" magazine to call it the nastiest

tech takeover in history. i'm pleased to have michael dell back at this table. welcome. >> thank you, charlie, great to be back. >> let's start with that. here you are at 23, you sold computers. people could order what kind of computer they wanted. you had taken a computer apart and knew what was inside them and you would put it together for them. and it made you a billionaire. then in 2007 you walked away from it? >> 2005 i became chairman and 2007 back to c.e.o. again. >> rose: okay, so you walked away and became chairman and somebody else came in as c.e.o. then you came back. so that was for you -- 2007 today is six years later. tell me about the years between 2007 and 2013. what did michael dell already a billionaire many times over, had all the money he could ever want, had a wonderful family, lived in austin, t *bgs, the, yu

had a wonderful life and you decided that what i love is this corporation and i want it to be all that it can be. pick up the story. >> you know, when you start a company, you have-- at least i do-- an incredible passion for it. and i've had that since the beginning when i was 18, 19 years old starting this business and what i saw was that there was an opportunity to do what we did in microprocessor based computers and p.c.s and servers to a much larger part of enterprise -- i.t. enterprise computing. so we set out to really build solutions. and to, in a way, disrupt -- in a positive sense and bring technology to the tens of millions of growing small and medium-sized businesses out there. >> rose: is this any different than what i.b.m. had done when

it said from making computers, it got out of that business and said "we're going to get into the service business." is what you decided to do with dell any different from that? >> i think it's very different for a couple reasons. one is that they were protecting a legacy of old things and we really didn't have that. we were going into this with a very fresh perspective. the other very different thing is that while we sell to the largest companies in the world, we also sell to the smallest companies in the world and all the entrepreneurial fast-growing companies. so in the last five or six years, we built this whole new part of the business, more than doubled the size of it from roughly 10 billion to over 21 billion and one of the big reasons to go private is to continue to accelerate that growth. and continue to build out the solutions and bring kind -- kind

of democratize i.t. in terms of software, data centers, services for all the growing businesses out there. >> rose: did you decide to do it because you couldn't believe you could do it because you had a quarterly commitment to stockholders who might not do that? >> you can do it but it's harder and slower. as a private company you can go faster. you don't have to focus on the short term and pleased to say that our business is up double digits already. >> rose: doesn't that say something terrible about being a public company? sometimes people need to go public for a range of reasons to put value on their equity and lots of other reasons so that they can do all kinds of acquisitions and things like that. but if you're saying as a public company i couldn't do all that i wanted to do because of the pressure of wall street, that says something terrible about being a public company. >> i think if you step back from this, i think we have an affliction of short term thinking that is broughter than

just the tech industry or finance. it goes into education and politics and across our society. i think this is just kind of one manifestation of it. >> rose: instant results and instant gratification. >> america is the land of instant gratification. and so taking a much longer-term perspective we can make the investments. we can bring the kinds of solutions, we can invest in innovation without being kind of bound to this 89-day planning psych that will public companies are sort of afflicted by. we're much more focused on the long term and want to make investments. so in the last five or six years we also spent $13 billion making acquisitions, building up these new areas which are now very substantial businesses for us. >> rose: why shouldn't i be critical of michael dell? because he's been there -- even though you weren't the c.e.o. and you went through that period. i mean, you missed things. you did not get -- you didn't see all the value of tablets.

you didn't see all the value of smart phones and that's exploded across the tech landscape. most people today think that, you know, the monetization of mobile is the most important thing in technician to the cloud and all that it offers. >> hey, nobody's perfect. >> rose: (laughs) i know. but that's a legitimate criticism of what happened at dell. >> absolutely. and tech is a relentlessly competitive and fast-changing space. what i will say is that i'm very proud that during the time our company was public our stock appreciated over 13,500% which was 27 times the amount of the s&p 500 during that same period. so, yeah, we missed something. everybody misses some things. but we built one heck of a business. it's still one heck of a business and now it's growing at double-digit rates and we're investing for the future and able to invest, be bold, focus

on our customers, innovate, invest in r&d, couldn't be more excited to be a private company once again. >> rose: okay, make the case for p.c.s because most people look at the numbers and they see tablets going like this and p.c.s going like this. >> well, news flash, a tablet is a p.c. >> rose: of course it is. i understand that. >> you look at a lot of tablets and they have -- we have a fast-growing tablet business and some people buy key boards for their tablets. >> rose: but you're not on the cutting edge of the tablet business. >> well, growing rather fast with both windows 8.1 and android. together it's a fast-growing business, but, you know, a tablet with a keyboard, that's a lot like a notebook. so it's a fast-growing space. we think the space is definitely consolidating. fewer providers out there, we're gaining share, we're going to continue to gain share.

and that's certainly an important part of our business. but we're absolutely investing in the data center and solutions and cloud and social and -- >> rose: and what do you think-- even though you're a private company and you don't have to tell me-- what do you think the revenue stream will change in the next five years in terms of what produces the large amount of revenue for dell. >> we want to double the whole enterprise solution software space. so it's $21 billion today, we'd like to double it to $42 billion. >> rose: how big is that market? >> well, this is the amazing thing about i.t . the overall i.t. market is $3 trillion. nobody has more than about 5% or 6%. >> rose: the enterprise solution of it is what do you think, though? >> about 80% or more of the $3 trillion and in business and enterprise. so the vast majority of it. so those are the spaces that were -- >> rose: how do you use these machines to make solutions and solve problems for corporations?

>> health care, education, all areas of public sector, small -- large companies. all these entrepreneurial businesses, the emerging markets, the growing businesses so i.t. is really the fulcrum of the economy. it's going to go from $3 trillion to $4 trillion and to $5 trillion. so it's right at the epicenter of how you solve the challenges that exist in health care, education, environment, energy. when you look at what's happening, tell me what you think the change elements are in the i.t. community, in the i.t. space. >> certainly one of the big changes is actioning all this information that we have. we've helped customers store and protect enormous amounts of data, very few of them today actually use it to make better decisions. so bringing intelligence and

better decision making that's a huge area. it's part of how i.t. becomes a larger part of the it industry and you see this increasingly where it used to be in the back office and the back rooms. now you can't actually have a company unless you're good at i.t. it's moved into marketing and selling all all aspects of customer -- >> rose: and extraordinary development in terms of help. these kind of sensor sensors thy have can tell us things we never knew. >> rose: and there's enormous opportunities. i go and talk to -- it's one of the larger hospitals in the new york area. they're really just beginning to take all the information they have and make good use of it. there's thousands of other hospitals, how do we compare this information so we can get better outcomes for patients? >> the more information you spend -- the more information you can take in from whatever source and the more you can analyze that the better results you can get.

>> rose: . >> and, of course, in our country we're right in the middle of this. we're number one in health care i.t . it's a big area of investment for us. helping hospitals with their clinical information systems, the evident-based medicine systems. every country you go to in the world they're dealing with the same issues and they want to have better information so they have better outcomes. >> rose: dell is headquarters in austin, texas, where you live. >> yes. >> rose: there is silicon valley outside of san francisco and where stanford is. there's part of boston, there's certainly part of different little pockets in america where they have i.t. centers. in some cases for technology and other cases having to do with pharmaceuticals and all that, bioethicses, the biomedical kind of developments. but can you make an argument at all that dell would have been

better if it was in silicon valley? because of all the cross fertilization that exists out there? >> first observation i have for you is you can't actually find a great company and not have a great university or multiple great universities nearby. everywhere in the world, right? >> rose: sure. silicon valley has stanford and university of texas. >> we have university of texas and a few others in the area. austin has been fantastic for us. we're thrilled to be in austin at our headquarters and we have several thousand people in silicon valley. dell's global economy. austin happens to be our home and our home base. next week we have this dell world conference. the city's been great to us and i think we've been great for the city. could it have happened in another place or could it have happened better in other place?

don't really know. what i do know is that austin's been a fantastic place for us and it's now a kind of destination for startups and we see an enormous amount of activity going on in our home. >> there's a reason on the other hand that people like mark zuckerberg went out to silicon valley because of the easy access to so much talent and that kind of thing. >> it has its downsides, too. >> rose: which are? >> people day trading their careers. >> oh, yeah, i got you. they're looking for the better opportunity at every moment. >> rose. >> exactly. and that in itself causes is its set of problem. >> we're living in a world that's changing a at a very fast pace and technology is at the heart of that change. i was in china last month and i spoke about how rapidly the

center of the economic world is really moving very quickly. >> rose: when you look at the global marketplace, what impact is china? not just consumers but manufacturers going to have on the i.t. world? >> china is an enormous end market. it's the largest end market for us to sell our products outside of the united states, and an enormous source of supply. enormous talented engineering resources. >> rose: but are there companies increasingly big enough to compete with dell and are the circumstances in china making it more difficult for you to compete with them? >> they have good companies and we have a fantastic business in china so we're all in in terms of china, in term terms of reseh

and development, manufacturing, selling, helping our customers in china. we see china as an important part of dell's overall business. and they're absolutely very competitive and good tough competitors. >> rose: how about europe? >> we don't have as many competitors from europe. we might have 20, 30 years ago. there's some software companies in europe. >> rose: business software companies especially. >> exactly. >> so when you look around, where will dell be in five years if things work for you the way you visualize them? >> as i said off to a good start. very focused on building this whole solutions capability. the way i built this business was we decided the company from the customer back. we said what problem is the

customer trying to solve and let's get in front of that and go address that. >> rose: even more that that you said what does the consumer want? we'll design a computer they want, not simply put a bunch of computers out there and say here's what we're offering you like it or not. >> and that's what we're doing in security, systems management, data center, in services. so the privilege to invest without this short term focus is fantastic and having control in a -- of our destiny in a way that we've never had in quite a long time is just fabulous. >> rose: you knew steve jobs well. what's the impact, do you think, of the success of apple because

of design and the extraordinary sense of design that steve and johnny ive have? >> i think they raised the bar absolutely in terms of design, ethic and intensity and focus. >> rose: and made it a tough competition for you. >> and plenty of others, too. >> rose: how do you take -- i mean, do you want to -- how do you incorporate that into your own company? how -- do you hire people from apple? do you say it's a desired objective to have? >> i think try to be another company is never a good strategy. so we start from the focus of -- >> rose: you're trying to be dell, not apple. >> what do we do and what do our customers want. we built a tremendous business serving hundreds of millions of customers being good at things that very good at.

there are lots of fine companies out there designing the company based on a competitor strategy, i don't believe in that. >> rose: i mentioned this to you earlier, eric schmidt from google pointed this out and he didn't talk about microsoft or dell but he talked about apple, facebook, amazon and google and talked about -- they're all in each other's space or want to be in each other's space. are they in a race for something and if so what is it? >> i think they're trying to control the consumer and the consumer's information and the consumer's account and that may be a plenty worthwhile thing to do. it's not what we're trying to do. we're focused on the devices themselves, on the enterprise, on the solutions. and the other 85% of i.t. that is in in business. >> rose: so you're saying we want to be one part apple and

one part i.b.m. even though you don't want to be what anybody sells but that's what you're saying? >> rose: the largest part of the $3 trillion and the fastest-growing part of the $3 trillion is something we haven't talked about. >> rose: tell me about it. >> it's companies that have between 100 and 5,000 people. this is where you see this explosion of innovation, new ideas, new companies. it turns out that those companies are the ones who are the fastest to adopt new technologies. and it sort of flows up into the larger companies later on. so let me give you an example. when we make out with micro process or based servers in the mid-1990s we went to go see our fortune 100 customers and we

actually got "well, that's a cute server you got there, mr. dell. why don't you come talk to my successor. because i'm not getting rid of my mainframe to replace. that" now if you go to the data centers in the big companies in the world you see dell servers. a third of all the servers in the world are dell. so we've done enormously well in data centers. of course that's moving into storage and networking, clouds, all those areas. so it started at the salesforce.coms, the work days, net suites, yahoo!, facebook, amazon. those companies buying from us, buying these microprocessor based servers and we learned a lot from those companies. we grew up on the microprocessor, right? so we weren't bound up with this legsy of old stuff. it allow us to innovate --

>> rose: so the fact that you were a p.c. manufacturer didn't inhibit you from moving fast in terms of manufacturing servers. and i hear you and you're basically saying that the biggest business opportunities are in providing servers to these companies. >> rose: . >> solutions. >> rose: . >> >> rose: providing the servers and solutions, correct? >> yes. >> rose: but you're saying you learned it from people who were buying your servers like yahoo! >> we learn everything from our customers. >> rose: all right, fair enough. but did you learn it fast enough so you said we want to be doing what they're doing. why don't we in a sense be in a business they're in rather than selling services? >> well -- >> rose: because you said you learned that from them. >> . >> we learned the requirements they had. so we had tens of millions of customers using our infrastructure products in all sorts of ways, whether they're in cloud software service, all

kinds of interesting businesses, we don't want to go compete with all those companies, we want to be the engine that powers them forward. >> rose: aren't you competing with them in some way? >> no, i think we're providing the infrastructure, the software, the services that help power their businesses. >> rose: what business might you be in that you're not in now in five years. where do you think we're developing a potential to be in a whole arena we weren't in. amson, i just spent time with jeff bezos, they got into the cloud business because of what they were learning from their own business. that's how they made the step into it. because they had been working on using those things as a solution to their own issues. correct? >> and we're powering a lot of those clouds. we're now also bringing those cloud services to our customers. so as customers are trying to figure out how do i create the

efficiencies in my business that exist in a cloud world, dell is a company they turn to help them do that. >> rose: does dell want to be in the business of making smart phones? >> no. >> rose: you tried that. (laughs) you don't? just too many people out there? too many -- too crowded or you believe there's-- as somebody once said-- better hunting somewhere else? >> i would endorse that view small shiny object, don't get distracted. there's lots of areas to go invest in. we see much more fertile ground in other areas. >> let's talk about the battle you went through in this context. you love your company. anybody who's ever founded a company, especially that had the growth it did because of the employees, because of all that. most people i know love the

business. they get up thinking "this is a wonderful place to go to because i created it." that's a wonderful feeling. then there are people-- and carl icon is just one example of them-- who don't care about products. and you've said that about icon. it doesn't matter what the product, is it's financial engineering. how do you feel about that? >> i think it doesn't feel right to me. but, you know, i guess he and others like him are doing what they -- >> rose: it makes money for them. >> and that's tpaoeufpblt at the end of the day we had a long, complicated process that resulted in where we are today. we're a private company and we get to innovate, make bold investments and focus on customers and that's done. so i think if they had a purpose it was served. >> rose: you don't think much

of them is what you're saying. >> that's not how i would want to spend my life. >> rose: does apple -- does dell need a new branding? a new sense of -- is part of your mission today to say look at the new dell. >> i think what we found is that people remember us for things we did five, ten years ago. so we built this whole new business, almost half the people in dell work in services. we have an enormous new business in software, networking, storage, helping customers from a solutions standpoint, way beyond the product. and back up a little bit here. one of the things that happened is the products became more and more powerful. customers basically told us that -- well, what do you know about

my business? so we had to learn the customers' business. whether it was in banking or financial or manufacturing, retail, education, health care, etc. and so it's a very different dell than a the one we had five or ten years ago and we continue to add significant capabilities. some came through acquisitions but we're making significant organic investments and events like our conference next week, dell world, will highlight that for thousands of customer bus it's important we get out in front and explain what it is we're doing. how we can add value for customers. the reaction has been very strong. business is up nicely. we're getting tons of great interest from our historical customers who want us to win. they want us to do more for them. and lots of new customers coming in. >> rose: how old are your kids now? you have four kids. >> 21, 19, and 17-year-old

twins. >> rose: do they want to work for dell? >> so far they're sort of -- their job is to be in school. >> rose: get to college, right. >right. and your wife is great? >> she's doing great. >> rose: michael dell from dell, inc. thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

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