Andy Jassy, ​​Amazon’s new CEO, stands out after building a profit machine

The name Andy Jassy may not have sounded to most people on Tuesday morning, but in the afternoon, the world knew him as the heir apparent and Amazon’s next CEO. A chief executive in his own right – if not well versed on the public stage – the head of Amazon Web Services and a 24-year-old employee on the technology juggernaut will step into the limelight to run the company from July onwards. founder Jeff Bezos takes over as executive president.

Jassy will run a highly profitable company at a time when it is bigger than ever, partly thanks to the pandemic. Amazon’s already huge retail business spent last year growing dramatically to meet the increased demand from pandemic home buyers, and Jassy’s own cloud computing unit controls a third of the market.

Amazon, however, also faces scrutiny from regulators as the federal government investigates Amazon for possible antitrust violations and lawmakers like Senator Bernie Sanders accuse the company of profiting from price spikes during the pandemic. As with Bezos before him, every movement of Jassy will be under the microscope.

How Jassy will handle this scrutiny over Amazon’s domain, in addition to running divisions of the company he was not a member of, is yet to be seen. He quietly transformed Amazon’s cloud services business into a market leader and the company’s most profitable segment. But he did not address the issues of regulators and Congress.

His latest press appearances show that Jassy feels comfortable speaking to controversy and is familiar with Amazon’s positions on its size and dominance. But he was not responsible for the company at the time.

Now he will face criticism on a number of issues, including the creation of the company’s facial recognition products; the security and authenticity of products sold by third-party suppliers that represent about half of Amazon’s sales; its impact on the environment; and its warehouse handling and delivery workers. Not to mention whether Amazon has illegal monopoly power.

Jassy follows Amazon’s corporate values

Analysts were not surprised by Jassy’s promotion. An experienced Amazonian who worked closely with Bezos, Jassy built AWS from the beginning in 2003. In a preface to a 2017 book on cloud computing, Jassy wrote that his team took an internal software tool designed to increase team efficiency engineering and turned it into a valuable product for other companies as well. This led to the creation of the Amazon Simple Storage Service, or Amazon S3.

Amazon did not make Jassy available for an interview for this story. His earlier speeches and writings show that Jassy embraces Bezos’ ethos of going all-in on a new idea, building on any success or moving on if it fails.

“This is an astute approach to succession planning,” said Nicholas McQuire, an executive analyst at CCS Insight. “Bezos created the project for Internet businesses: rapid innovation, large scale and relentless customer focus,” he said, adding that Jassy is one of the few people who can replicate this formula.

“Often, you will have to reinvent yourself several times” to build a business that will last for decades, said Jassy in a speech at AWS ‘re: Invent conference in December. He praised Netflix for “cannibalizing its own DVD rental business” when he anticipated the importance of streaming.

Jassy’s understanding of why cloud computing has become essential for businesses everywhere also applies to Amazon’s biggest success story. “With the cloud, you can provision what you need, increase it perfectly when needed and eliminate resources and costs when not needed,” said Jassy in the preface to the 2017 book.

It’s the kind of flexibility that is at the heart of Amazon’s ethics.

Jassy will face controversy

Following a corporate mantra that made Amazon a success for shareholders is one thing. Another faces external criticism and attempts at regulation. That same taste for scale put Amazon in the crosshairs for its market dominance and potential power to nullify or acquire competitors.

In a 2019 interview with PBS ‘Frontline, Jassy dealt with questions about whether Amazon has a lot of power. At the time, he said that Amazon does not see itself as large, accounting for only about 1% of the international retail sector. It will be a different task to convince antitrust regulators that Amazon raising $ 1 for every $ 100 in global retail sales is not surprising (and the number in the U.S. is higher).

Regulators are particularly concerned about Amazon’s private label businesses and its potential ability to unfairly harm other retailers on its platform with cheaper competing products.

Jassy also spoke openly about political issues. As Business Insider pointed out, he tweeted in support of a U.S. Supreme Court decision advocating job protections for LGBTQ workers and accused high rates of incarceration in the US, and he highlighted the injustice of the murders of Ahmaud Arbery, Breonna Taylor and George Floyd during an opening speech by AWS re: Invent. Bezos has been less vocal on political issues, and it is not clear whether Jassy will be able to express herself so freely now that she will be the face of Amazon.

Jason Schloetzer, a professor of business administration at Georgetown University, said Jassy will have to take a diplomatic approach like Amazon’s face. Still, the new CEO is unlikely to have to give up his political positions, he said. “It looks like there is a wave of organizations starting to take on these more public positions,” said Schloetzer. “It is part of the movement of organizations that seek to have a positive role in society, instead of just being there to generate value for shareholders.”

Then there’s Amazon’s ability to control what’s on the Internet. AWS commands more than a third of the cloud market. Technically, AWS can also take much of the Internet offline. In the same Frontline interview, Jassy alluded to that power.

“If there is any documented evidence of people who misuse the technology,” he said, “we will suspend people’s ability not only to use the technology, but to use AWS”

Jassy was addressing concerns that the police would abuse their facial recognition technology. But his words took on new meaning this year, when AWS suspended cloud hosting services for Parler, a social media platform used during the Capitol riot on January 6, to not moderate content that calls for violence.

Now Jassy will have to receive criticism from Congress and regulators not only as future CEO of Amazon, but also as the owner of the decision to take Parler offline. Regardless of whether or not AWS is right in doing so, it will have to explain what it means it could.