Amazon’s next CEO Andy Jassy is an inventor and a man after Jeff Bezos’s own heart
Andy Jassy, who is set to replace Jeff Bezos as the next CEO of Amazon, is the founder and CEO of Amazon Web Services, the global tech major’s cloud computing business. Under Andy, Amazon will see strong continuity after Bezos in the company's obsession with invention and customers, say experts.
When incoming Amazon CEO Andy Jassy first signed up to join the global technology major in 1997, he had no inkling what his role or title would be. Only a vague idea that it would be “something entrepreneurial.”
And he wasn’t wrong.
In a little over five years in, Andy founded Amazon’s cloud computing division, Amazon Web Services (AWS), with a small team of 57 people at a time when “What’s the internet?” was a frequent question asked of Amazon Founder and CEO Jeff Bezos and his leadership team.
Since 2003, Andy — who was promoted to CEO of AWS in 2016 — has been instrumental in turning the global retail giant into a dominant technology leader in infrastructure cloud computing and making the AWS name synonymous with cloud.
AWS CEO Andy Jassy, who is poised to take over as Amazon's second CEO in the company's 27-year-long history
“Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” Jeff Bezos wrote in a letter to Amazon employees on Tuesday where he announced he would step down as CEO and assume the role of Executive Chairman later this year.
As Executive Chairman, Jeff Bezos will focus on new products and other important initiatives such as the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and his “other passions”.
About Andy — the Amazon veteran who has been with the company for over 22 years and is now poised to become the second CEO in Amazon’s 27-year history — Jeff wrote: “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.”
The rise and rise of AWS
To be clear, under Andy’s leadership, AWS — regarded as the pioneer of and market leader in the global cloud computing industry where it competes with Microsoft, Google, and Oracle — has ballooned into a fast-growing business, with annual revenue of $46 billion, and accounts for more than half of the company’s overall profits.
In addition, given the acceleration in cloud adoption, AWS’s rate of growth — currently at 29 percent year-over-year — continues to accelerate, with the time taken to reach each incremental $10 billion of annual revenue declining over the years, from 13 years when it first started to 13 months today.
In other words, AWS recorded its first $10 billion revenue milestone in November 2016, 13 years after it was founded in 2003; it then took around two more years to add another $10 billion to reach $20 billion in October 2018 and finally, around 13 months to reach $30 billion in November 2019 and cross $40 billion in December 2020.
Indeed, as Andy describes it, AWS today has a “very pervasive everyday impact in your life” because of its broad and diverse customer base that cuts across enterprise, government, academia, startups, and non-profit organisations.
“(AWS has a) very pervasive everyday impact in your life and yet we say, and we really strongly believe, that this is still early days in people moving to the cloud and even though the business is growing fast to a reasonable size, I think it’s still going to be very different 10 years from now,” Andy remarked in an interview with Goldman Sachs in early 2020.
AWS CEO Andy Jassy
In pursuit of an entrepreneurial experience
And yet, Andy says neither he nor any of the other early Amazon employees ever imagined it would grow to be as big as it is today. In fact, at the time of his joining, Andy “didn’t really know” what he would be working on at Amazon.
But the self-professed New Yorker moved to Seattle on the first Monday of May 1997 — immediately after writing his final exam in Harvard Business School the prior Friday — to take up his new job at Amazon because he thought it would be “a really interesting entrepreneurial experience.”
Building and scaling AWS into one of the most successful cloud infrastructure companies globally with a focus on reinvention may have proved to be that entrepreneurial experience for Andy Jassy.
“It’s been an amazing adventure,” Andy said at a Goldman Sachs event last year where he was asked about his journey in building AWS.
“In the early days of building AWS, it was mainly startups building their businesses from scratch on top of AWS. These were companies like Slack, Instagram, Pinterest, Stripe, Robinhood, and companies like that. But what’s happened over the last half a dozen years is that the enterprise and public sector have very rapidly adopted AWS and the cloud. You see every imaginable vertical in the business segment now using the cloud in a meaningful way and in the public sector, we have 6,500 government agencies worldwide, 11,000+ academic institutions, and 29000 non-profits — so a very diverse broad customer base and growing very fast,” he added.
Andy Jassy as CEO = strong continuity
Industry experts say Andy’s obsession with re-invention and customer experience matches Jeff’s and that his appointment as CEO will ensure strong continuity for the business as it continues to disrupt and scale.
Andy worked directly with Jeff Bezos as his chief of staff in the early years of his Amazon career. That experience, Andy has said, helped shape his professional development and was an exercise in building trust for Jeff and “grooming a future leader of the company.”
“Andy Jassy is going to continue Bezos' gameplan. Undoubtedly, Bezos will have a heavy hand in the company's direction as chairman,” said Gene Munster, Managing Partner at Loup Ventures.
Andy Jassy as Amazon CEO will mean strong continuity in leadership after Jeff Bezos steps down later this year, say experts
Andy is also among Jeff Bezos’s famed S-team, short for senior team, which comprises an elite group of the Amazon founder’s most trusted executives who he regularly meets with to discuss and make important business decisions.
Amazon Finance Chief Brian Olsavsky and Amazon India Head Amit Agarwal are also part of the S-team. The other members from the AWS division include Peter DeSantis, Vice President, AWS Global Infrastructure, and Charlie Bell, Senior Vice President, Utility Computing Services.
“We believe that many of the processes and culture surrounding innovation and long-term investments will remain under CEO-designate Andy Jassy, which are even more critical given the scale of the business,” KeyBanc analyst Edward Yruma said as he raised his price target on the Amazon stock to $3700 from $3500.
Shares of the company closed at $3,380 on Tuesday, after the company reported its quarterly revenue rose more than $100 billion for the third consecutive quarter to end the year at $386.1 billion, a 38 percent increase from annual revenues of $280.5 billion in 2019.
AWS recorded 28 percent growth in fourth-quarter revenue, with operating income up 37 percent and backlog up 68 percent.
“AWS announced over 180 new services and features, and customer momentum during the quarter was strong with new commitments from companies such as JP Morgan, ViacomCBS, and Twitter. Despite unique challenges in the AWS selling environment, the 68 percent year-over-year increase in backlog points to the continued and accelerating secular trend toward cloud,” Keybanc’s Kruma added.
Room to grow and reinvent
With just four percent of total IT spending currently on the cloud, there’s still a lot of growth ahead, Andy Jassy said at AWS’s flagship re:Invent 2020 event in December 2020, where he highlighted the impact of the COVID-19 pandemic on driving enterprises to reinvent and accelerate their cloud adoption.
Businesses, he added, will need to reinvent themselves to sustain and remain successful for a long period of time.
“It’s really hard to build a business that sustains for a long period of time and a successful one at that. To do it, you have to reinvent yourself and do it multiple times over,” Andy said — something we can expect Amazon to continue to do after Andy Jassy takes over from Jeff Bezos to helm one of the world’s most disruptive technology companies.
(With inputs from Thimmaya Poojary, Vishal Krishna)
Edited by Saheli Sen Gupta