- Daily Zen
The AWS head will get to test his mettle running one of the world’s most successful companies.
Amazon CEO Jeff Bezos announced Tuesday that he will no longer head the company, as the retailer reported its third consecutive profits and record sales of over $100 million in the third quarter. Andy Jassy, head of cloud division Amazon Web Services known as AWS, has been named Amazon’s next CEO. Jassy, 53, joined Amazon in 1997 after Harvard Business School, founding AWS and growing it to a cloud platform used by millions of customers, the company’s website said.
Andy Jassy’s appointment as new Amazon CEO is a clear indication that Amazon is moving from its online retailer avatar to a fully-fledged cloud computing internet company.
Tom Johnson, chief transformation officer at global marketing firm Mindshare said, “Jassy’s background in steering AWS shows just how top of mind those services are to Amazon’s business strategy. It’ll be interesting to see how that affects their strategy and balancing that priority with a growing ad business and the commerce behemoth,” he said.
“Andy was literally prototyping his ability to lead Amazon, through his work at AWS…
Under Andy Jassy’s leadership, Amazon has signed major customers, including Verizon, McDonald’s, and Honeywell. Silicon Valley startups have long relied on AWS, and the division’s annual revenue grew 37% in 2019 and 30% in 2020, making it a major contributor in making Amazon a tech market leader.
Jeff Bezos in a note to employees posted on Amazon’s website, wrote, “As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.”
He added, “I’ve never had more energy, and this isn’t about retiring.”
Chief Financial Officer Brian Olsavsky said on a call with analysts that Bezos would work on “large one-way door issues, such as acquisitions and other strategies where there is a high cost to reversing course.”
The above statement of control over major acquisitions and big money decisions by Bezos does not seem to suggest that. The similarity is that Bezos is moving on to his passionate endeavors of media, environment issues, space, and funding sustainable business ideas by the big corporates.
Jeff Bezos has handed over the day to day running of the show at Amazon to his trusted lieutenants some years ago. Amazon created two CEO roles reporting to Bezos, one was Jassy, and recently retired consumer CEO Jeff Wilke held the other.
Bezos has not been visible on the media as other CEOs, despite him hogging headlines as the richest man and Amazon continually being in the news for its performance. Jassy has been more forthcoming in media interviews with jibes at rivals, and his talks at tech conferences have been more on the lines of a rock star performance.
Jassy will now have to move on to bigger responsibilities and not just run AWS, which is a critical part of Amazon but nowhere close to the full company’s scope. Jassy’s AWS, fell slightly short of expectations in the fourth quarter. It posted revenue of $12.7 billion, short of the $12.8 billion analysts had estimated.
Net sales for the current quarter for Amazon are expected to be between $100 billion and $106 billion.
Under Andy Jassy’s leadership, Amazon has signed major customers, including Verizon, McDonald’s, and Honeywell.
“They are digital commerce; they are a grocery store, they are a trucking company, they are in shipping, warehousing and manufacturing. They have a lot of people in their ecosystem, a lot of blue-collar workers, they were the largest employer in the pandemic. There are a lot of things going on,” Daniel Newman, principal analyst at Futurum Research, said.
“Andy was literally prototyping his ability to lead Amazon, through his work at AWS,” Neman added.
Another question is with the antitrust laws becoming more stringent and governments more vocal about monopolies, and Amazon might spin off some of its divisions. AWS is one such consideration. Jassy might not be too happy about it due to his associations. But being Amazon’s new CEO means taking some hard decisions.
Amazon is on a high tide at the moment. The pandemic may have wrought havoc with many businesses, but for Amazon, it has been a good year.
To take charge at such a time, Jassy will have to work hard to maintain the momentum. He might not have retail management experience, but his technical and leadership skills are sound. Bezos will always be there to guide and lead from behind.
What remains to be seen is how Jassy puts his own stamp on the organization.
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