Following Jeff Bezos’s retirement from Amazon’s leadership, the company saw a slight drop in its stock market value as investors digested the news of the e-commerce giant’s founder’s departure. Luckily for Amazon, its new CEO is Andy Jassy, a veteran of the company’s old guard, who saw it grow from its beginnings as a simple online book distributor.
Andy Jassy joined Amazon in 1997 after graduating from Harvard Business School. At the company, Jassy worked as a technical advisor to Jeff Bezos. During his career at the company, Andy Jassy saw Amazon grow from a simple bookseller to today’s retail and online services giant. During an interview on the Harvard Business School podcast, Jassy said, “No, I didn’t know what my job was going to be, or what my title was going to be.”
Jassy is currently the CEO of Amazon Web Services (AWS), Amazon’s line of cloud-computing services that today are used by thousands of businesses and governments around the world to design their online services. With Jassy as CEO of all Amazon, it is clear how important cloud computing has become in the retail giant’s portfolio.
Cloud computing services are outsourcing technological resources for companies that allow them to create their websites and offer their services online without the need to incur in the purchase and maintenance of physical data centers. On the other hand, with cloud services, they can rent a provider that allows them to access a web infrastructure already created, which allows them to store and maintain their databases.
Although AWS services accounted for just over 10% of the company’s total sales over the past year, at the end of 2020, low marginal costs allowed this service to account for as much as 28% of Amazon’s profits. AWS left an operating profit of $ 3.6 billion in the last trimester.
At the moment AWS cloud services, despite not being the largest line of business, are the highest percentage of operating profit of all Amazon’s lines of business. While online retail remains Amazon’s revenue center, cloud services will become increasingly important to the company.
“This speaks to how important the cloud is becoming to our economy,” said Rishi Jaluria, an analyst at investment research firm D.A. Davidson & Co. “With Andy Jassy in charge of all of Amazon, it shows how the company wants to bring that core AWS DNA to all of Amazon.”
Today, cloud services are used by thousands of private companies, public corporations, and government agencies, estimated to have a market value today of about $257.5 billion and will reach $362 billion by 2022.
AWS currently dominates more than 30% of the cloud computing market, surpassing rivals such as Oracle and Microsoft. Jassy will have to devise strategies to stay ahead of this service as Google and Microsoft announced that they would expand their cloud computing services this year.
Andy Jassy, as the new CEO of Amazon, will have to compete in a growing, more dynamic, and accessible cloud computing market, ensuring profits for the company, without neglecting the retail business line through which Amazon dominates a third of e-commerce in the United States.