The change at the top of Amazon has far-reaching consequences for the future of the e-commerce giant. Under Andy Jassy, Amazon’s cloud services grew into the group’s primary profit generator. And the importance of that division will only increase.
From Harvard to Amazon in 3 days
For the general public, Amazon will first and foremost remain the archetypal online store. But for the company, the online shop, with its notoriously tight margins, has long ceased to be its core business. The fact that founder Jeff Bezos is now passing the torch to Andy Jassy is far from a coincidence.
Jassy can most certainly be called an Amazon veteran. The Guardian picked up a quote from Jassy, which he said on a podcast from the Harvard Business School (HBS), where he studied. “I took my last final exam at HBS, the first Friday of May in 1997, and I started Amazon next Monday. And no, I didn’t know what my job was going to be, or what my title was going to be.”
But that didn’t last long: Jassy sowed the seeds for the AWS, or Amazon Web Services, division in Amazon’s garden. In essence: offering cloud services such as server space to host websites to whoever was willing to pay for them. Thus, Jassy responded very early on to a growing demand by companies for a more flexible IT infrastructure without having to continually invest in servers or mainframes.
World leader in cloud services
Today, AWS leaves the industry’s established names, such as Microsoft and Oracle, far behind. The company controls half of the worldwide cloud infrastructure and can boast a crushing 30 per cent market share in the cloud computing market.
Choosing Jassy, who for the time being is not being replaced at the head of “his” division, illustrates what Amazon’s focus will be in the coming years. The competition in cloud services is shifting and heating up. Microsoft and Google have taken up the challenge and not without success. In the last fourth quarter, both companies were able to present good growth figures for their cloud offerings.
Jeff Bezos stays close behind
The way Jassy views Amazon’s other services, such as its various retail initiatives, is more difficult to assess. The man has a good understanding of technical matters, which he demonstrates annually during keynote speeches at the AWS conference in Las Vegas.
With Bezos around as executive chairman, Jassy will be kept on his toes when it comes to keeping an eye on the group’s other activities. But the chances of Amazon surprising us in the near future with manoeuvres within the retail industry, of the same calibre as the Whole Foods acquisition, seem rather slim.
