AWS has been made the profit engine of Amazon
Andy Jassy, who at present heads Amazon Web Services (AWS), the company’s cloud computing platform will step up as the CEO of Amazon.com Inc. and replace Jeff Bezos by Q3 2021.
Bezos, the CEO of the company, who founded Amazon about 30 years ago, will transition into the role of an executive chairman. Since 1997 Jassy has been with the company and has been instrumental in making AWS the company’s profit engine.
For building AWS, the web services division of the company, Jassy has been highly respected. AWS runs many of the world’s biggest websites.
Amazon identified India under Bezos’s leadership as a strategic market in early 2013 and has so far committed to invest as much as $6.5 billion for growing its ecommerce business in the country. Bezos when visited India in September 2014, seemed determined to endear himself to the country and said that India “amazed and energized” him.
Even after stepping aside as CEO, the founder Bezos will likely keep identifying new frontiers for the world’s dominant ecommerce company. Meanwhile his successor, Jassy, gets to deal with escalating efforts to curtail the company’s power.
It was a surprise to hear the announcement that Bezos is handing off his CEO position but it does not means he is parting ways from the company. He is the vision of the firm who turned an online bookstore founded in 1995 into a behemoth worth $1.7 trillion.
Although the current AWS head will be the CEO, Bezos will continue as an executive chairman – corporate speak for board leaders who, unlike most, stay involved in key operational decisions.
Investors after hearing about the change didn’t flinch, instead appeared to be more focused the company’s blockbuster earnings. The company’s stock price on Wednesday wound up declining 2% to close at $3,312.53.
Bezos in a blog post mentioned that the CEO position had pulled him away from exploring new ideas and initiatives that could yield growth opportunities. Focusing on such innovation will be his intent now, along with his other ventures including the newspaper, The Washington Post and the rocket ship company, Blue Origin.
The shift will saddle the AWS head with some responsibilities which Bezos clearly did not enjoy. The increasing scrutiny of Amazon’s clout in an online shopping market is perhaps the most daunting, which has become even more essential to consumers during the Covid-19 pandemic.
Google and Facebook have already been slapped by the US government with antitrust lawsuits. Both regulators and lawmakers have left little doubt that they are taking a hard look at whether similar action is warranted against Amazon and Apple.
Meanwhile Amazon is being taken in an antitrust case by European regulators filed late last year. The company has been accused of mining the data of merchants selling products on its site to gain an unfair advantage over them.
The AWS head, along with trying to forge his legacy will likely have to ward off the antitrust threat. Jassy will have to deal with consequences as some industries and some governments uncomfortable with Amazon’s size. This is going to be some of the new era of the AWS head’s leadership.
Also, Jassy may have to face pressure from critics who believe that the company’s success has been built in part by mistreating many of its 1.3 million employees, especially those in the distribution warehouses and delivery trucks drivers for being paid far less.
Bezos’ departure as CEO could become a chance for the company to turn over a new leaf. The AWs head needs a shoulder to lean on and Bezos will likely be there for him.
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