Andy Jassy joined Amazon in 1997
Credit: Reuters
How do you replace Jeff Bezos? In Amazon’s case, you might choose the closest thing you have to the original.
Andy Jassy, who was named as Bezos’ successor on Tuesday, has been one of the founder’s closest lieutenants since joining Amazon in 1997, when it had 200 employees and was just three years old.
The 53-year-old was the first employee to become Bezos’ technical advisor or “shadow”, a now-mythical consigliere role at Amazon that involves joining the chief executive at every meeting and involves unparalleled access to him. In conversation, he adheres faithfully to the same well-established phrases that Amazon’s executives always learn: customer-obsession and “Day One” thinking are gospel.
So while Tuesday’s announcement that Bezos was stepping down as Amazon’s chief executive after 27 years was a surprise, the name of his replacement was not. Bezos has long been grooming Jassy, who for 18 years has run Amazon Web Services (AWS), the company’s giant cloud computing business.
In 2016, Jassy and Jeff Wilke, the head of Amazon’s consumer and retail business, were given “CEO” titles for their respective businesses, a sign both that Bezos was delegating the day-to-day running of Amazon, and a nod to his two potential successors. Last August, Wilke announced he was leaving Amazon to explore “personal interests”, and the cloud boss became the heir apparent.
Bezos email to Amazon 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,” Bezos told staff on Tuesday.
The message was one of sleekly-executed succession. Bezos will not be stepping aside until the third quarter of the year, and even then, to an executive chairman role that will mean his presence is still deeply felt in Amazon. Major moves such as acquisitions and strategy changes — or in Amazon’s language, “one-way-door issues” — will still be Bezos’ purview. “Jeff is not leaving. He is getting a new job,” chief financial officer Brian Olsavsky said on Tuesday.
The announcement, made alongside record financial results, was so well-choreographed that Amazon’s shares did not budge after what was ostensibly an earth-shattering exit. In the investor Q&A that followed the announcement, it took Wall Street analysts six questions to bring up the change of chief executive. Spending on logistics was, apparently, more pressing.
There are no immediate signs of change. Bezos has taken a hands-on role during the pandemic, as Amazon struggled to meet exceptional demand, but before that had spent less time on the company’s day-to-day business. In the same way that Google restructured itself as Alphabet in 2015, crystallising how its founders Larry Page and Sergey Brin were moving away from management, Bezos’ move to chairman may have simply formalised a structure effectively already in place.
Amazon revenue
But the new chief is still likely to put his stamp on Amazon. A music junkie and sports fanatic to Bezos’ bookworm, Jassy wrote the company’s plans to start selling CDs in 1998, one of its first moves beyond books. But it is AWS that has taken up most of his career there.
In the early 2000s, Amazon executives started to wonder if the internet infrastructure the company had painstakingly built to run its shopping website — storage, web hosting and computer processing — could be sold to other companies.
Jassy was a Harvard business graduate rather than an engineer, but was put in charge of the idea. Amazon Web Services, launched in 2006, began to service a new breed of post-dotcom internet start-ups that did not want to pay for their own equipment. Major corporations signed up, and in 2013, the CIA followed.
Today, AWS is so big that when it suffers technical issues, half of the internet seems to go offline. It is also vastly profitable. It brought in $45bn in sales last year — just 12pc of the company’s total — but $13.5bn in operating income, more than the giant retail operation.
“AWS… is arguably the most profitable, important technology company in the world,” Olsavsky said.
Some analysts argue that AWS is worth more than Amazon’s retail business. And while Jassy’s promotion does not indicate that the shopping website it is most famous for will fade away, it suggests it is only one part of a bigger scheme.
I have some questions for Mr. Jassy. https://t.co/DLpTd2AEio
— Congressman Ken Buck (@RepKenBuck) February 2, 2021
Amazon’s marketplace, in which third-party vendors pay for access to the company’s storefront, is now bigger than the company’s first-party sales. It is building a logistics and delivery network to rival the likes of FedEx, and is offering its checkout-free shopping technology to rival retailers. These projects — selling Amazon’s own infrastructure to businesses — are all closer to the cloud business that Jassy built than Bezos’ original vision of selling books on the web.
Leaving Jassy to run the ship may go some way to easing political opposition to Amazon. Bezos became particularly popular among Trumpist Republicans in recent years due to his ownership of the Washington Post, an asset that Amazon’s founder has called a “complexifier”. Amazon claims a $10bn US defence contract was awarded to Microsoft instead of AWS, in part because Donald Trump had a “personal dislike” of Bezos.
Bezos, who appeared uncomfortable during a lengthy Congressional grilling alongside Facebook, Google and Apple’s bosses last year, may relish less regulatory attention. But Jassy will not escape it. Shortly after his appointment was announced, Republican Congressman Ken Buck, one of those on the panel that interrogated Bezos last year, tweeted: “I have some questions for Mr. Jassy.”
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