Amazon founder Jeff Bezos will step down as CEO and change into government chairman, naming the top of its profitable cloud computing division as successor in an indication of the corporate’s transformation from internet retailer to web conglomerate.
This summer season, Bezos, 57, will hand the keys of the world’s largest on-line retailer to Andy Jassy, head of its cloud division Amazon Net Companies often known as AWS. The announcement on Tuesday settles a long-running query about who would exchange the world’s second-richest individual on the firm’s helm.
Bezos is ending his function as CEO on a excessive notice: the enterprise he started as an web bookseller 27 years in the past is now one of many world’s most useful corporations and posted three consecutive report income after losses in many years prior. On Tuesday, Amazon reported quarterly gross sales above $100 billion for the primary time.
Jassy, 53, joined Amazon in 1997 after Harvard Enterprise College, founding AWS and rising it to a cloud platform utilized by tens of millions of consumers, the corporate’s web site mentioned. He had been a transparent contender for the highest job since Amazon created two CEO roles reporting to Bezos years in the past, the opposite held by not too long ago retired shopper CEO Jeff Wilke.
Tom Johnson, chief transformation officer at international advertising agency Mindshare, mentioned Jassy’s promotion underscored the centrality of the website hosting enterprise to Amazon’s technique.
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“Jassy’s background in steering AWS shows just how the 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 mentioned.
Jassy is thought for understanding extremely technical particulars and has repeatedly taken jabs at legacy participant Oracle Corp and cloud rival Microsoft, which AWS continues to exceed in gross sales. Bezos has made fewer public remarks about opponents.
Beneath Jassy’s management, Amazon’s cloud enterprise has signed main prospects together with Verizon, McDonald’s, and Honeywell. Silicon Valley startups have lengthy relied on AWS, and the division’s annual income grew 37% in 2019 and 30% in 2020, serving to cement its place because the market chief.
One contract AWS didn’t win was the $10 billion “JEDI” venture from the Pentagon, which was awarded to Microsoft.
Jassy has aimed to bestow a rock-star aura to keynotes at AWS’s annual Las Vegas convention, talking earlier than over 60,000 attendees in 2019 after upbeat music preceded his discuss.
Bezos, who already has centered on different private enterprises in years previous, mentioned in a notice to staff posted on Amazon’s web site, “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.” Blue Origin is Bezos’ area firm.
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He added, “I’ve never had more energy, and this isn’t about retiring.”
Chief Monetary Officer Brian Olsavsky mentioned on a name with analysts that Bezos would work on “large one-way door issues,” akin to acquisitions and different methods the place there’s a excessive value to reversing course.
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Amazon’s web gross sales rose to $125.6 billion as shoppers turned to the world’s largest on-line retailer for his or her vacation procuring, beating analyst estimates of $119.7 billion, in line with IBES information from Refinitiv.
Amazon shares had been up lower than 1% in after-hours buying and selling.
Jassy’s AWS, historically a shiny spot, fell barely in need of expectations within the fourth quarter. Whereas the cloud computing division not too long ago introduced offers with ViacomCBS, the BMW Group, and others, it posted income of $12.7 billion, in need of the $12.8 billion analysts had estimated.