Who is… Andy Jassy, Amazon’s new CEO

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Peter Griffin

Jeff Bezos, the world’s richest man, is relinquishing his grip on day to day oversight of the e-commerce giant he created. His replacement has big shoes to fill and a background steeped in cloud computing.

Here are three things to know about Amazon’s new CEO Andy Jassy.

1. Jassy is responsible for AWS, one of Amazon’s biggest successes

Andy Jassy, 53, who assumes the role of Chief Executive of Amazon in a few months time, has been with Amazon most of the company’s history – since 1997. But his career there has largely been defined by his efforts to build Amazon Web Services, which is now one of the most successful divisions within Amazon. AWS, which has the largest market share of the public cloud business globally, generated 52% of Amazon’s profits in the last quarter.

AWS had its genesis in 2000, when an effort began in earnest to develop internal infrastructure support for Amazon’s core business – it’s online store. Jassy realised that the speed at which the company could develop new applications and repand its infrastructure wasn’t sufficient to match its growth trajectory. It was really expensive to host Amazon’s services in other companies’ data centres and Amazon was a low-margin, high-volume business.

So he made a case for developing the capability in compute, storage and database capacity at Amazon.

 “We expected all the teams internally from that point on to build in a decoupled, API-access fashion, and then all of the internal teams inside of Amazon expected to be able to consume their peer internal development team services in that way,” Jassy explained in 2016

“So very quietly around 2000, we became a services company with really no fanfare.”

By 2003 the ideas behind AWS were starting to take shape, a core principle being that customers should be able to scale up and reduce their cloud computing capacity as required. In 2006, the company launched Amazon Elastic Compute Cloud and quickly developed the market for scalable cloud computing and hosting.

Despite the likes of HP, IBM, Google and Microsoft being more obvious contenders to offer such services, AWS stole a march on all of them and has maintained an unassailable lead ever since.

Even Jassey was surprised at the success of AWS, which has kept its edge by innovating in its cloud offering, including machine learning and AI tools to allow customers to make the most of the platform.

He told TechCrunch in 2016: “I don’t think any of us had the audacity to predict it would grow as big or as fast as it has.”

2. He’s a dyed in the wool Amazonian

Jassy served as chief of staff to Jeff Bezos as well as Amazon’s product director for music before taking up the reins on what would launch as AWS in 2006. He likely only had one serious internal candidate to compete with for the CEO role in Jeff Wilke, another veteran Amazon executive.

But Wilke, who runs Amazon’s consumer business, which is responsible for the lion’s share of Amazon’s revenue, is stepping down this year, departing with an estimated US$158 million worth of Amazon shares.

Jassy was a Harvard MBA graduate who moved from New York to make his way in Silicon Valley. He ended up in Seattle as a new recruit at Amazon which was his first and only real job to date. So he grew up on the mentorship of Jeff Bezos and, it seems, even emulates his style to some degree.

Jassy is known for being slightly awkward with customers, but a stickler for detail and capable of being decisive and unsentimental when making business decisions. The same could be said for Bezos. Like his boss, Jassy has become more visible on social justice issues as the power of Amazon has increased and his star has risen as well.

3. The Bezos ethos demands that Jassy changes things up

As a disciple of Jeff Bezos, Jassy buy’s into his ‘Day 1’ philosophy, which Bezos and Amazon are famous for.

Day 1, which filters its way out to staff in those famous Amazon memos, is named after the building the Zon occupied in the early days and suggests that the company needs to stay in that mindset permanently.

As soon as a company becomes complacent and comfortable with its place in the market, Bezos argues, the rot has already set in. Many credit that approach to the success of Amazon, which is always tweaking its services and products to stay ahead of the competition.

From his executive chairman position, Bezos will no doubt continue to evangelize adherence to Day 1. There’s no doubt Jassy will continue to follow that path. The question is where will he take Amazon next?

There’s clearly still significant growth in e-commerce to mine, but competitors are nibbling away at Amazon’s position in cloud computing. The company has stayed out of the search engine and social network businesses, but in recent years has developed its advertising offerings in competition with Google and Facebook. 

If the track record of Bezos is anything to go by, a few leftfield moves are likely to define the Jassy era at Amazon. Few anticipated the AWS success or the rise of Alexa. Day 1 involves keeping the market guessing, then surprising everyone with an incredible product. 

Of course, change may well be forced on Jassy. He assumes the CEO role following a year of antitrust scrutiny of Amazon which this year could turn into action to crucial the e-tailer’s market power. Amazon has faced criticism that it effectively uses its data insights to compete with its own customers and to prevent real competitors from getting a toe hold against it.

Its expansion into a range of markets and its sway as an employer of 1.3 million people have also been criticised. Jassy may be forced to make changes to the company’s structure and business model or endure a federally-instigated break up at worst.

Either way, Jassy has his work cut out for him.

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Peter Griffin

Peter Griffin has been a journalist for over 20 years, covering the latest trends in technology and science for leading NZ media. He has also founded Science Media Centre and established Australasia's largest science blogging platform, Sciblogs.co.nz.

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