Why Andy Jassy was picked to fill Jeff Bezos’s big shoes at Amazon

Andy Jassy, Amazon
Andy Jassy, Amazon

The man who built AWS into a $40bn business is taking the big seat at the e-commerce company

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4 February 2021 | 0

In the news that shook the technology world, the founder and CEO of Amazon, Jeff Bezos, was to start his transition away from the day-to-day running of the company and hand the reins to Andy Jassy in October 2021.

Jassy’s long history at Amazon

An Amazon guy through and through, Jassy is a nontechnical but detailed and highly competitive executive, seldom resisting a jab at his leading competitors – especially Oracle founder Larry Ellison. Within Amazon, he has been widely known to have almost complete autonomy over Amazon Web Services (AWS), the cloud computing division he has led to being a $40 billion business in its own right.

As his boss and mentor Bezos wrote in a note to staff: “Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.”

 

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Jassy, a die-hard fan of New York sports teams and Dave Matthews Band, was one of Bezos’s first hires after taking the e-commerce company public in 1997. He was plucked straight out of Harvard Business School to become a marketing manager, later becoming vice president for Web services, which he helped lead to become its own business unit in 2006 when it started selling access to virtual machines with the Elastic Compute Cloud (EC2) product.

Despite his high standing in Amazon and his sizable personal wealth, the 53-year-old Jassy keeps a fairly low public profile. He seldom tweets, and when he does give interviews, they tend to be fairly anodyne. That being said, he can be outspoken on social issues, criticising former President Donald Trump on multiple occasions and strongly supporting the Black Lives Matter movement. He is well respected by both his peers and rivals across the technology industry.

“It’s not unexpected to see Jeff Bezos begin the process of handing over leadership of Amazon to Andy Jassy. Although Jeff will still be involved with Amazon, Andy Jassy is a good choice to become CEO,” said Ed Anderson, a Gartner analyst. “Beyond its e-commerce strengths, Amazon is fundamentally a technology-driven company. Andy Jassy, as much as anyone in the industry, knows how to apply technology to transform and grow businesses.”

Jassy “is not only a visionary leader. He is a strong operator… and he has got a great track record of developing multiple things and businesses within Amazon, not the least of which is AWS, which is arguably the most profitable, important technology company in the world,” said Amazon CFO Brian Olsavsky.

Jeff Wilke, former CEO of Amazon’s worldwide consumer business, was long pegged to take over for Bezos, before surprisingly opting to retire this year, opening the door for the cloud guy to take the top seat. Dave Clark eventually took over as retail chief last year.

Jassy’s selection as Bezos’s replacement as CEO suggests the cloud business is the new core of Amazon. “While consumer e-commerce is a big market, B2B is an even bigger prize. Picking a leader who is driving their main enterprise offering may indicate the future of Amazon is in fact selling more to businesses than consumers. In general, a much bigger prize in the long run,” said Gartner analyst Allen Bonde.

The top job won’t come without significant challenges, however. Amazon is facing a growing slew of antitrust fights on multiple continents, stiff competition from old foes Microsoft and Alphabet, and ongoing scrutiny of its working conditions, especially for low-paid drivers and fulfilment center staff. On the same day as Bezos announced he was stepping down, Amazon settled a $62 million case with independent drivers over withheld tip payments.

“The key question will be how Jassy manages some of the inevitable bumps in the road Amazon will face with issues like antitrust, workers’ rights, and employee activism on this rise,” said Nick McQuire, vice president of enterprise research at CCS Insight. “He has proven to be very outspoken on broader political issues in the past and he will face increasing media scrutiny as the firm continues on its trajectory.”

Who will take over from Jassy as AWS CEO?

“A far bigger question than who succeeds Bezos is who succeeds Jassy,” said Forrester analyst Paul Miller. “There are strong internal options, but Amazon might take this chance to bring in fresh ideas from outside the company. Either way, both AWS and Amazon are in a good place, allowing the new CEOs to build on sound foundations while also bringing their own fresh perspectives to their roles.”

The early betting will be on an internal hire, with AWS sales leader Matt Garman the frontrunner. Before heading up sales for AWS, Garman worked in a variety of roles within the compute services division. If Jassy were to opt for more of an engineer for the role, senior vice president and 23-year company veteran Charlie Bell would be the natural choice.

What Bezos will do now

Bezos will become the executive chair at Amazon and will no doubt retain a high level of influence over the company he founded in 1994. He intends to focus on “new products and early initiatives,” according to his noteto staff. This is expected to include his continued efforts to expand Amazon’s tendrils into healthcare and the groceries business, as well as future acquisitions. It’s worth noting that AWS, and Jassy by extension, has not been particularly acquisitive over the years.

Bezos, the second richest person in the world, has recently had his attention stretched elsewhere, to his other investments and philanthropic work, including the Day 1 Fund, the Bezos Earth Fund, Blue Origin, the Washington Post, “and many other passions,” he told staff. “I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have.”

Bezos is stepping away from the day-to-day running of Amazon with the company in great financial shape, announcing a record $125.6 billion quarter on the same day as his transition plan was put in place.

IDG News Service

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