Andy Jassy steps out of the shadows – so who exactly is Amazon’s new CEO? | Business
Andy Jassy made a powerful – painful – first impression on the billionaire Amazon founder Jeff Bezos soon after he joined the then start-up bookseller in 1997.
During a rambunctious game of “broomball” – a cross between lacrosse football that another Amazon executive invented is still overly competitively played at the company – Jassy, then a fresh-faced recruit from Harvard Business School, accidentally hit Bezos over the head with a kayak paddle.
Bezos, 57, forgave Jassy, 53, quickly (repeatedly) promoted the New Yorker, who he recognised as almost as competitively driven as he was.
On Monday, Jassy, who is currently chief executive of Amazon’s fast-growing cloud services division Amazon Web Services (AWS), will be promoted again to be installed as Amazon’s second-ever chief executive, with Bezos becoming executive chair of the board as he steps away from day-to-day control of the business. The handover comes on the 27th anniversary of Amazon’s official founding on 5 July 1994.
Jassy’s elevation to the top job is taking place at a critical time for Amazon, which is facing a growing threat of regulatory action to control its dominance of markets across the world. And, as Bezos takes on fresh challenges – including taking a flight into space on his Blue Origin company’s rocket later this month – Jassy will be tasked with retaining the company’s “day one” startup philosophy at what is now one of the world’s largest companies, employing more than 1.3 million people.
“He will have to balance trying to be everywhere everything to everyone with the limits to that,” says Natalie Berg, a retail analyst co-author of Amazon: How the World’s Most Relentless Retailer Will Continue to Revolutionise Commerce. “There is a risk of going from disruptor to disrupted. There is a challenge to innovate at scale maintain agility culture that’s allowed them to be as nimble as they have been. There are a lot of other disruptive businesses coming in. Fifteen-minute supermarkets like Weezy make Amazon look like a laggard.”
Coronavirus pandemic lockdowns helped Amazon’s sales soar by 38% in 2020 to a record $386bn, $23bn of “operating income” (profit, to you me). In the UK, Amazon’s sales jumped by 51% last year to a record $26.5bn (£19.5bn) as people trapped at home because of the lockdowns turned to the internet retail company to buy items unavailable in closed high street stores to keep them entertained at home.
A huge increase in demfor cloud storage – from big streaming companies such as Netflix Spotify government departments including the Central Intelligence Agency (CIA) large parts of the UK civil service – has driven massive increases in revenue profit at AWS, which Jassy runs.
That success has heightened scrutiny of Amazon demands for further regulatory controls on a company that has been heavily criticised for its low tax payments treatment of workers.
Michael Pachter, an analyst at Wedbush Securities, said Jassy’s biggest challenge will be handling that scrutiny. “The retail division got so frenzied to provide a remarkable [service] for customers, it probably did take advantage of employees. That stuff will have to be cleaned up,” Pachter says. “Jassy is going to have to become a spokesperson to be the guy who testifies before Congress.”
Jassy will have to do that, run the company, with Bezos sitting on his shoulder as chair. “Jassy will run the meetings but anything that requires a strategic decision a lot of money, they will take it to Bezos,” Pachter says.
On the plus side, Jassy has the trust of Bezos after running the AWS division, which brought in $13.5bn of revenue in the first three months of 2021, a 32% increase on the same period a year earlier. AWS is also Amazon’s most reliable source of profit. Despite AWS representing 12% of total first-quarter revenue, the division made $4.2bn in operating income, which works out at 46% of Amazon’s total profit.
Amazon’s move into cloud storage was Jassy’s idea. In the early 2000s, when Jassy was Bezos’s chief of staff, he was tasked with finding out why engineers were taking so long to develop new applications. He discovered the delays were being caused by the difficulty engineers were having sharing large amounts of data with one another, the idea for internal cloud storage was born.
Jassy pitched the idea of extending the internal network to other companies at a corporate executive retreat in 2003 Bezos gave the go-ahead. “I don’t think any of us had the audacity to predict it would grow as big or as fast as it has,” Jassy has said of AWS.
It was not the first time Jassy has pitched a pivotal business development idea. Years earlier, it had been his idea to expAmazon from purely an online bookshop to CDs DVDs.
Dan Ives, another analyst at Wedbush, described Jassy as “one of the most powerful leaders, not just within the cloud tech sector but in the world of business”.
Jassy, who grew up in the affluent town of Scarsdale in New York state went to Harvard University Harvard Business School, joined Amazon in 1997 as it prepared to float on the stock market. “I took my last final exam of graduate school the first Friday of May 1997,” Jassy said in an interview with tech site Recode. “I started at Amazon the next Monday, I didn’t know what my job was going to be. I didn’t know what my title was going to be, but it was very important to them that I show up that Monday.” Amazon floated on 15 May 1997.
He had agreed with his wife that they would go out to the west coast for only three years. “In fact, we wrote an agreement on a napkin in a bar, my understanding is the statute of limitations on that napkin has expired,” he said. They live in a 10,000 sq ft 1906 property in Seattle’s Capitol Hill neighbourhood; Jassy has converted the basement into a mini sports bar where he watches his favourite east coast sports teams the New York Mets, Giants, Rangers play. A big sports fan, he is also the minority owner of the Seattle Kraken National Hockey League (NHL) ice hockey team.
For most of his time at Amazon, Jassy’s role was to act as Bezos’s “shadow” “intellectual sparring partner”. However, he has shown himself more prepared than Bezos to use his platform to speak out on political societal issues.
After the death of Breonna Taylor, a black medical worker who was shot killed by Louisville police officers inside her flat, Jassy tweeted that: “[We] can’t let Breonna Taylor death go with no accountability. We still don’t get it in the US. If you don’t hold police depts accountable for murdering black people, we will never have justice change, or be the country we aspire (claim) to be.”
He has also spoken out in favour of greater equality for LGBTQ+ people, against mass incarceration. “It’s nuts that the US has 5% of the world’s population 25% of the imprisoned population,” he also said on Twitter. “And, the racial bias with which this incarceration is happening is awful.”