Jassy appointment highlights the importance of cloud for Amazon

AWS boss will replace Jeff Bezos as CEO later in the year after almost two decades of cloud dominance

Andy Jassy on stage

The head of Amazon Web Services (AWS), Andy Jassy, has been announced as the successor to Jeff Bezos, who is stepping down as CEO later in the year. 

Bezos is not leaving the company entirely as he will take on the role of executive chair

The decision to hire Jassy, however, is seen as logical, given how long he has been at the company and how well AWS has expanded under his leadership. Jassy joined in 1997, founding AWS in 2002, and he has been at the forefront of cloud computing for nearly two decades. 

For the fourth quarter of 2020, AWS brought in $12.7 billion, adding to the company's record-breaking revenues. The cloud unit has been a reliable contributor for over a decade with consistent increases in revenue. The success of AWS has led many to suggest that Jassy's appointment will usher in a new era for Amazon, with even more of a focus on cloud computing. "Andy Jassy taking over signals the importance of not only AWS as the profit driver for its parent but also the role of cloud tech that will drive the growth of Amazon as a digital platform business going forward," according to Forrester VP Allen Bonde. "While consumer e-commerce is a big market, B2B is an even bigger prize. Picking a leader who is driving their main enterprise offering may indicate the future of Amazon is in fact selling more to businesses, than consumers. In general, a much bigger prize in the long run."

Forrester's principal analyst James McQuivey agreed, adding that it was key to avoid a Bill Gates-style handoff. The company struggled to successfully transition Microsoft into a new era following the appointment of Steve Ballmer.  

"By choosing Andy Jassy, Bezos is potentially skipping the Ballmer transition phase and moving right into a Satya Nadella mode, turning to an expert in running a cloud business, someone who understands the long-term role that infrastructure and business services will play for Amazon, even as it tries to maintain its role as a consumer innovator," said McQuivey.

The most comparable executive change is IBM's decision to replace CEO Ginni Rometty with Arvind Krishna. The company is splitting into two units, one cloud-focused and another that will take care of its infrastructure business. The cloud arm, which will arguably be more prominent, is built on much of Krishna work, such as the acquisition of Red Hat and its hybrid cloud strategy. 

AWS CEO Andy Jassy speaking at the 2020 re:Invent

Similarly, Jassy has been the driving force behind AWS since 2002 and is arguably one of the most important figures in the mass adoption of cloud computing and e-commerce across the world. 

Recent Q3 analysis from Canalys put AWS as the top cloud provider by a considerable distance. Between July and September, the firm received more business 32% than Microsoft (19%) and Google Cloud (7%) combined. 

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