By Hellen Zaboulani
Amazon has some big changes in the horizon.
Andy Jassy will take over as CEO of the ecommerce giant, replacing founder Jeff Bezos. Jassy will step up to the position in the third quarter of this year.
The 53-year-old Harvard grad’s claim to fame in Amazon was building its highly successful cloud computing service, know as Amazon Web Services (AWS). AWS which Jassy founded in 2003, has evolved into an extremely profitable technology company, which dominates the cloud infrastructure market. As of mid-2020, Amazon controlled 33% of the global cloud infrastructure services market, followed by Microsoft holding 18% and Google at 9%, as per Synergy Research. CNBC reported, last week Amazon announced that AWS revenue in the fourth quarter increased 28% to $12.7 billion. Operating income jumped 37% to $3.56 billion, and the cloud company now accounts for 52% of Amazon’s total operating profit. Jassy has been CEO of AWS since 2016, and his name is well known on Wall St and among online business owners. Jassy owns about 85,000 shares of Amazon stocks, valued at roughly $281.5 million as of Tuesday’s open price of $3,312.49.
As reported by the Business Insider, as CEO Jassy’s best play may be stepping aside from AWS and spinning it off. In an interview with Insider on Thursday, former AWS exec Tim Bray said there are “a bunch of good reasons” for Jassy to spin off AWS. Bray was vice president at AWS and a prominent engineer for five years before publicly resigning in May 2020, as protest for the company firing warehouse workers who raised concerns about working conditions amidst the Coronavirus pandemic. Bray, who worked closely with Jassy has praised his leadership. “AWS has both higher growth and higher margin than the mainstream retail part of Amazon,” Bray said. “I think the likelihood that AWS does get spun off is not trivial at all.”
In the past, Jassy has brushed off any talk about spinning off AWS, a good source of income for the company. According to Bray, however, the company is starting to attract too much hostile scrutiny in the antitrust realm. “If [spinning off AWS] is going to happen, Amazon would be better off to do it under their own volition in a planned way as opposed to the Justice Department pointing a gun at their head,” said Bray. He adds that while Amazon isn’t on the top of lawmakers’ antitrust list, Amazon will in the future be increasingly at odds with AWS, which will provide computing and storage for ecommerce competitors. He also noted that an IPO now can fetch a good price, citing a valuation of roughly $500 billion reported in the summer by the Economist.
