Monday, October 25

Who is Andy Jassy? The great challenges facing the replacement of Jeff Bezos at the head of Amazon


  • Relief Jeff Bezos will cease to be Amazon CEO this year

Amazon is the store of all things. This is how it is titled in English (‘The Everything Store’) the biography of Jeff Bezos written by the journalist Brad Stone in which the founder, main shareholder and (for now) chief executive of the company, Jeff Bezos, discovered, much to his regret, who his true biological father was.

But Amazon hardly makes any money selling stuff. That’s a ‘cloud’ thing. Amazon’s ‘cloud’ division accounts for only 12% of the company’s turnover, but 53% of the profit. So it’s no wonder Bezos’s successor is going to be Andy Jassy, the head of that division.

Amazon’s ‘cloud’ is not as ubiquitous as the online store, not even as its streaming service Amazon Prime, nor, in the US, as its food supermarkets organize (and very expensive) Whole Foods. But it is, also, everywhere. The next time you open a document online and see that the URL starts with ‘amazonaws’, remember that that means Amazon Web Services – it’s the ‘cloud’, brought to your screen by Andy Jassy.

Bezos has announced that he is leaving Amazon’s day-to-day life at an enviable moment. The president, CEO, founder, and main shareholder (has around 16% of the capital) of the company has announced his partial retirement while recounting that the company has increased its turnover by 44% and its profits by 130% in the last quarter in relation to the same period of the previous year. It has pulverized its own forecasts and those of the market. Amazon is worth as much on the stock market as everything that all Spaniards do in a year.

What manager would not like to retire with those numbers and, encina, being the richest businessman in the world, to dedicate himself to running the company from afar, protecting the environment and make space rockets (his company Blue Origin) while also owning one of the most influential newspapers in the world (the ‘Washington Post’? And all this with 57 years just turned.

The question is the inheritance that Bezos leaves to Jassy. One of the very few black spots in the presentation of results in which Bezos announced his withdrawal was, precisely, Amazon Web Services (AWS), the unit headed by the newly appointed ‘dolphin’. Its turnover was 12,700 million dollars, 100 less than expected by the market, and its growth was only 28%, compared to 50% of its biggest rival, Azure, from Microsoft. Even so, Amazon’s ‘cloud’ controls 34% of the US market, compared to Microsoft’s 20%.

But the ‘cloud’ is going to continue to grow, as AWS’s incredible order list reveals. Jassy’s problems are going to be very different and, fundamentally, of three types.

The first is the end of the pandemic. Amazon, like all large technology companies, has grown exponentially thanks to confinements and, simply, the fear of going to the ‘super’ shop. If the Covid-19 spread, it will revert to a more normal world. It will undoubtedly be a world in which there will be fewer stores, and in which we will buy more through the internet, but not enough to justify excessive growth. Amazon itself has acknowledged that its 2020 results will be nearly impossible to replicate in 2021.

The second component is the politician. Bezos leaves the first line of the company’s management with Amazon involved in two possible cases for anticompetitive practices in the European Union and the United States. Bezos’ company is being investigated in Brussels and Washington for the use of its sales platform, in which third-party companies operate. According to its critics, Amazon allows these companies to operate on its platform but then it begins to market the same products, only cheaper.

The issue is complicated, because Amazon, like any other company, has the right to sell the same as the competition, and at lower prices. And Amazon, as the provider of the platform on which these companies sell, has access to data on their sales which, in addition, in many cases it offers those users of its services.

The problems of ‘the store of all things’ do not have the seriousness of those of its rivals Facebook Y Alphabet (the owner of Google) but they cannot be bypassed. The EU has shown particular enthusiasm when it comes to going against internet companies (the fact that these giants are all American and none European is obviously a fluke when it comes to explaining this competitive zeal) and in the US there is growing hostility towards these companies.

The left accuses them of monopolies, to promote the online expansion of the ultra-right and to exploit its employees. And this is something that Amazon does not escape, with its frontal rejection of the unions, and certain practices, such as putting GPS to the workers of its warehouses so that they can collect the boxes by the shortest way. And the right blames these companies for helping the left. Again, there Amazon falls squarely, with its decision to close the ‘hosting’ of the far-right website Parler, and with Bezos’ ownership of the ‘Washington Post’, the diary, along with the ‘New York Times‘, more critical of the US with Donald Trump.

It is true that the owner of the ‘Washington Post‘It’s not Amazon, but Bezos. The problem is that the identification between the employer and the company is total. Amazon is Bezos. And that leads to the third question for Jassy: what will be her relationship with her mentor? Bezos will continue to be Amazon’s largest shareholder, and will continue to be involved in R&D projects, as he himself has announced to the company’s employees. Will Bezos be able to retire to live the crazy life with his new girlfriend, TV host Lauren S├ínchez?

In principle, the relationship between Bezos and Jassy is perfect. The future CEO joined Amazon in 1997, when the company was only four years old, and since 2000 he has been Bezos’ classroom advisor. He was the one who convinced the founder, in a meeting at his home, of the advisability of launching a ‘cloud’ operation in 2003. Jassey, like Bezos, is obsessed with the customer. For him, that is the first and almost the last. Like Bezos, he doesn’t make decisions on instinct. And, like Bezos, he can be obsessively ‘controlling’.

That is the house brand. Amazon has never been a company with an easy culture. Not for warehouse workers or engineers. There are few concessions to the ego. A walk through downtown Seattle, where its headquarters are located, is enough to find an infinity of yellow buildings, such as the company’s logo. There is no spectacular Googleplex like Alphabet’s in Palo Alto, and no futuristic monster like Apple’s giant ‘donut’ in Cupertino. There are no big posters. The largest, in fact, is from a Google building, in the middle of the ‘campus’ – technology companies often refer to their headquarters by that name, perhaps to pretend that they are not companies, but knowledge centers – and small signs with the Amazon logo that indicate the existence of an app that allows a guided tour of the neighborhood.

According to insiders at Amazon, if Jassy is effectively in control, the company will change little. But that’s what is always said. The reality is that companies linked to their founders change, and a lot, when they leave. Tim Cook’s Apple is different from Steve Jobs’s. Steve Ballmer’s Microsoft was very different (for the worse) from Bill Gates’. What Andy Jassy’s Amazon will be like (if Bezos really lets him be “his” Amazon) remains to be seen.

According to the criteria of

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