Who is Andy Jassy, the longtime Amazon executive set to become its new CEO?
Andy Jassy, the incoming CEO of Amazon, is well known to Wall Street. But most Americans who don't run an online business likely know nothing about the executive who runs the company's cloud-computing service, an increasingly important business for the e-commerce titan.
Jassy, 53, is a longtime Amazonian, having joined the company in 1997. Here's what you need to know about the Harvard Business School grad and what his elevation means for Amazon.
He heads Amazon's most profitable division
Jassy heads AWS (formerly known as Amazon Web Services), which he helped build from the ground up starting in the late 1990s. AWS is the most profitable division of the e-commerce giant, and Jassy's promotion to CEO underscores the importance of cloud computing to the company.
"This is a division that has been essentially the golden goose. Even though it only makes up 12% of revenues, in any given quarter it contributes at least half or two-thirds of its profit," said Tuna Amobi, analyst at CFRA. Last year, AWS brought in $11 billion, more than half of Amazon's $21 billion in earnings.
Before AWS became AWS — a crucial part of today's internet, providing cloud hosting services to companies from Netflix to Capital One to Verizon FIOS — it was the foundation of internal systems built by Amazon that enabled the company's e-commerce platform to dominate.
"AWS supports a lot of the back-end infrastructure that has made [Amazon's] retail business dominant over the years," said Nick Shields, analyst at Third Bridge, a research and consulting agency. "What became AWS is storage and analytics that they built to support the core retail business so they could do more personalization, gather customer data and so forth. AWS is very critical to the success of the core business."
He's a company man
Jassy has been at Amazon almost as long as founder Jeff Bezos. Jassy joined the company immediately after graduating from Harvard Business School.
"I took my last final exam at [Harvard Business School] the first Friday of May in 1997 and I started Amazon next Monday," he said last fall, according to the Daily Mail. "No, I didn't know what my job was going to be, or what my title was going to be. It was super important to the Amazon people that we come that Monday."
Later that year, he married Elana Caplan, a fashion designer from Los Angeles. The pair have two children and live in a well-to-do neighborhood in Seattle, according to Jassy's public profiles.
Jassy owns $287 million worth of Amazon shares, according to FactSet. He's been one of the highest-paid Amazon executives over the years, raking in $19 million in 2018 and $35 million in 2016 — more than Bezos himself. Jassy is a regular contributor to Amazon's political action committee, donating $60,000 to the fund since 2009.
Jassy's long tenure makes him a logical replacement for Bezos, analysts said. Jassy's temperament is also said to be similar to the Amazon founder's, said analysts who described him as a "low-blood pressure" manager driven by facts and data.
"I don't know if there's a more logical person to step into Bezos' shoes than Jassy," Amobi said. "He's basically a core operator — he's very well-liked, his management philosophy dovetails well with Bezos'. He's a hard-charging disciple of Amazon's corporate philosophy."
He'll have to defend Amazon's controversial decisions
As head of AWS, Jassy hasn't escaped allegations of monopolistic behavior that have long dogged Amazon. AWS is by far the largest player in cloud computing, accounting for one-third of the market, according to Canalys, a technology analysis firm.
Jassy was also key in the decision to boot the far-right social media network Parler off Amazon's servers, according to reports from Bloomberg and CNBC — a move that has riled conservative politicians.
"I'm confident that in an antitrust hearing there will be Republican senators complaining to Amazon and asking about the Parler question. Whether that's relevant to the question of, does Amazon have a cloud computing monopoly? I don't know," said Jason Boyce, an online retail veteran who helps businesses sell their products on Amazon's marketplace. (Boyce contends that Amazon's size in cloud computing or online sales does make it a monopoly.)
Meanwhile, some civil rights groups criticize AWS as enabling digital surveillance and eroding privacy rights.
"Andy Jassy's tenure leading Amazon Web Services through the years when Amazon acquired Ring, partnered with almost 2,000 police departments, secured surveillance contracts that powered ICE and DHS, developed Rekognition and agreed to host Parler should be deeply disturbing to anyone who cares about privacy and racial justice," Maurice BP-Weeks, co-executive director of the Action Center on Race and the Economy, said in a statement.
Representative Ken Buck, the top Republican on a congressional committee that last year recommended breaking up Amazon and its peers, tweeted on Tuesday: "I have some questions for Mr. Jassy."
"Amazon's size makes some industries uncomfortable, some governments uncomfortable, and Andy Jassy will have to deal with the consequences," Gartner analyst Ed Anderson told the Associated Press. "That will be some of the new era of his leadership."
Bezos is still his boss
When Jassy takes the reins of Amazon later this year, Bezos will become the company's executive chair — a corporate term for someone who steers a company without the day-to-day responsibilities of running it. While the role is more hands-off than a CEO, Bezos will remain very much in charge, if more behind the scenes.
"Jeff is not leaving. He is getting a new job," Brian Olsavsky, Amazon's chief financial officer, said on an earnings call Tuesday, making the transition sound more like a reshuffling of tasks. Olsavsky noted that Bezos will focus on "one-way door issues," Amazon's term for decisions that change the course of a business, such as whether to buy a competitor or enter a new sector.
"Jeff Bezos has held a firm grip on the company for a long time, " Ken Perkins, president of RetailMetrics, a retail research firm, told the AP. "I have to believe he will have a say in what is going on and have a big hand in big picture decisions."
Boyce added: "What changes is that Bezos removes personal responsibility in nine months, and he's not the one paraded in front of the judiciary committees. Whatever Amazon becomes in five to 10 years will be because of Bezos' vision, but he's not going to take any of the public humiliation that's coming."
With reporting by the Associated Press.
