Tuesday , March 2 2021

Meet Andy Jassy, Amazon’s next CEO

Amazon is getting a new CEO for the first time in its 27-year-history: cloud computing chief Andy Jassy, who will be replacing co-founder Jeff Bezos later this year. Jassy, currently the CEO of Amazon Web Services (AWS), is a core believer in Bezos’ business philosophies and a longtime veteran of the company, having run the cloud division since its inception nearly two decades ago.

Jassy, who turned 53 last month, is now getting the opportunity to make his mark not just on Amazon, but also the world and the major ways the company shaped it, from Whole Foods to a million-person-plus warehouse workforce to massive logistics and AI divisions with far-reaching real-world effects.

Far from a household name, Jassy is still one of the most consequential executives in Amazon’s history. His promotion underscores the importance of cloud computing to the biggest tech titans that now play vital roles in powering the entire internet. In the case of AWS, that includes everything from Netflix and Spotify to the Central Intelligence Agency and the Democratic National Committee.When AWS goes down, huge chunks of the internet go with it.

The transition of power is reminiscent of Satya Nadella’s promotion to the CEO role at Microsoft in 2014, after Nadella spent three years running the company’s Azure cloud business. Nadella modernized many elements of Microsoft’s business and company culture with a focus on the cloud and mobile computing, as well as an excellent eye for major acquisitions. Jassy’s ascent to the top job at Amazon may similarly usher in an era of transformation for the e-commerce giant.

The big question Amazon insiders and those on the outside looking in will try to answer in the next six months, before he takes the job in the third quarter of the year, will be whether Jassy deviates from Bezos’ approach or sticks to business as usual. Yet if Jassy continues to see himself as an acolyte of Bezos and his famous “Day 1” mentality — which argues that companies start to decline and die the moment they rest on their laurels — it will mean plenty of change is on the horizon. For Amazon, change is both the most important survival instinct and its most successful business tool.

When Jassy joined Amazon in the late ‘90s, the company was years away from thinking about the cloud and still focused solely on e-commerce. Jassy graduated from Harvard Business School in 1997 and joined Amazon soon thereafter as part of a wave of fresh MBAs flocking to the tech industry before the dot-com boom. Jassy moved out West with the intention of one day returning to New York, according to an interview last year on The Disruptive Voice podcast, but he’s never held a job at another company.

Jassy went on to become Bezos’ first “shadow” adviser, something like a corporate chief of staff who followed the CEO every day and sat in on all of his meetings, according to a profile of Jassy published late last month by Insider. Jassy also made a peculiar first impression on his boss by accidentally hitting him in the head with a kayak paddle during a characteristically competitive game of company broomball, as recounted in Brad Stone’s 2013 book, The Everything Store: Jeff Bezos and the Age of Amazon.

Bezos and Jassy’s relationship deepened in the years after, with Bezos tasking his younger lieutenant with exploring the then-nascent technology of cloud computing around 2003. The goal was to see whether it made sense for Amazon to offer hosting services to other websites and businesses, back when many of the largest tech companies mainly relied on third-party data centers or had already begun looking into or actively building their own. The idea came from Amazon’s own struggles to build an external development platform for retailers three years earlier, so third-party companies could build their own e-commerce operations.

It was Jassy who helped identify the problem: Amazon’s development tools, frankly, sucked. The company set out to improve them by creating easier-to-use APIs and other technology that would let any one team at Amazon pull from a common pool of resources. “So very quietly around 2000, we became a services company with really no fanfare,” Jassy told a crowd at the re:Invent conference in 2018, according to TechCrunch.

It took Amazon another six years of exploring and experimenting — with the effort to formally develop AWS really taking off after a fateful 2003 executive retreat at Bezos’ house, Jassy recounted — before the company launched its first cloud product in 2006. “In retrospect it [AWS] seems fairly obvious, but at the time I don’t think we had ever really internalized that,” Jassy said at re:Invent. The company’s early investments paid off, as it took competitors years to realize the business opportunity and launch comparable cloud products.

“If you believe companies will build applications from scratch on top of the infrastructure services if the right selection [of services] existed, and we believed they would if the right selection existed, then the operating system becomes the internet, which is really different from what had been the case for the [previous] 30 years,” Jassy explained.

That belief about the future of the internet proved prescient. Today, AWS powers a huge bulk of apps, services, and websites consumers and employees use every day, largely because Amazon has unparalleled resources and developer tools that make building and tapping into its massive resources as easy as using a standard API. It’s why so many companies forgo building their own data center operations and instead choose AWS or one of its competitors. Unless you’re Facebook or Google, both of which built out their own global data center operations, it’s simply easier to use Amazon than to do it yourself.

Jassy deserves credit for architecting the company’s cloud vision, having run AWS since it was created and becoming its CEO after Bezos promoted him to the position from a senior vice president role back in 2016. His tenure at AWS has also turned cloud computing into the most profitable of Amazon’s divisions, accounting for roughly 63 percent of the company’s profits in 2020 and putting it on track to make more than $50 billion in revenue this year. Amazon now controls about a third of the entire cloud infrastructure market, more than its next closest competitors (Microsoft and Google) combined, according to Synergy Research.

Without AWS’s momentous growth, Amazon may not have had the resources to invest as much money back into its retail, logistics, streaming video, hardware, smart home, AI, and other divisions over the years. That makes AWS effectively the engine of Amazon’s continuous reinvention, and Jassy is the spark that helps drive it.

In recent years, Jassy has clearly fashioned himself as an heir apparent to Bezos, spinning tales of Amazon’s early days and the remarkable beginnings of AWS and how those learnings can be applied to other businesses. He’s a keynote speaker at Amazon’s high-profile re:Invent conference, an industry gathering dedicated to cloud computing, and he’s become a more public face of Amazon in recent years. Last summer, when longtime logistics executive Jeff Wilke, another potential Bezos successor, announced his retirement, the writing was on the wall. Someone would eventually take over from Bezos, and it was looking more likely than ever to be Jassy.

Jassy’s management quirks and persona have also become somewhat legendary within the company, similar to Bezos’ infamous email style and meeting decorum. Jassy is known internally for his exhaustive attention to detail and hands-on approach, his penchant for back-to-back meetings, and his welcoming embrace of social justice issues, according to Insider.

In September, he tweeted publicly about accountability for the killing of Breonna Taylor, and he’s been outspoken in his support for the Black Lives Matter movement and LGBTQ issues. Jassy, however, is also known for having defended controversial decisions, like Amazon’s sale of its reportedly flawed facial recognition technology to police departments and the government. (Amazon announced a one-year ban on its sale of the tech to law enforcement starting in June of last year.)

Jassy’s approach is also characterized as one of making tough and unprecedented calls, best exemplified in AWS’ decision to ban social media platform Parler last month following the US Capitol riot. It was a move the company did not take lightly considering its “religious” commitment to maintaining service for customers, Insider reported at the time. But it felt compelled to do so after outcry from employees and because Parler posed “a very real risk to public safety,” Amazon said in a statement at the time.

Jassy will no doubt be in charge of making even tougher calls in the future. But that’s part of both the job and the Amazon culture he’s helped cultivate. “It’s really hard to build a business that sustains for a long period of time,” Jassy told a virtual crowd at the all-digital Amazon re:Invent last December. “To do it, you’re going to reinvent yourself, and often you’re going to have to reinvent yourself many times over.”

That’s precisely what Amazon has done over the years, transforming from an online bookseller into an e-commerce giant and onward into a hardware maker, a major Hollywood and entertainment industry player, and now the second largest employer in the country. All the while, Jassy has worked behind the scenes to ensure AWS was growing into the profit machine it is today.

Now, Jassy appears ready for a reinvention of his own, at a time when Amazon is still at the forefront of so many industries and continuing to explore new territory, all while it faces increasing antitrust pressure in the US and overseas and mounting competition in the AI, cloud, and e-commerce industries.

“Typically, what you see is the desperate kind of reinvention — companies on the verge of falling apart or going bankrupt, deciding they have to reinvent themselves. When you wait until that point, it’s a crapshoot whether you’re going to be successful or not,” Jassy explained. “You want to be reinventing when you’re healthy. You want to be reinventing all the time.”

This Article was first published on theverge.com

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