Amazon sign

Amazon CEO Jeff Bezos Is Stepping Down, But Is It Still Business as Usual?

February 04, 2021 Leadership
David Roe
By David Roe

Is Amazon without Jeff Bezos as CEO conceivable? The short answer is no, and the long answer is no as well. Jeff Bezos is not going anywhere. While the long-time Amazon executive Andy Jassy will be the new CEO, Bezos will remain as the company’s executive chairman which means that that will still be directly involved in key strategic decisions unlike the usual run-of-the mill chairmen and women who are not generally involved in strategic decisions.

Executive Chairman Jeff Bezos

Seattle-based Amazon’s chief financial officer, Brian Olsavsky, made the move sound like a mere shuffling of chairs. “It’s more of a restructuring of who’s doing what,” he said during a Tuesday call with reporters. Nor did investors seem particularly concerned, focusing most of their attention on Amazon’s earnings

So, will there really be any changes at Amazon with Bezos moving out of the CEO position? It could be argued that the appointment of Andy Jassy to the top job is a sure sign of the fact that cloud computing is now where the future of technology lies. That, however, is not news, and it has been clear for a long time that we are fast approaching a point in time where we will not distinguish between cloud and other kinds of computing. Computing will be, by its nature, cloud-based.

Amazon’s Business Model

And it is unlikely that the business model is going to change either. “With Jeff Bezos’ departure, the fabric of Amazon’s business likely will not change drastically as the company culture is deeply embedded, Daniel Elman, analyst at Nucleus Research, told us. “Plus, Bezos will still be involved in the business and he is young enough that he may even return for a second act at Amazon down the line.

More to the point, he believes Amazon will be in safe hands under Andy Jassy. He points out that Jassy has led AWS to industry-leading success competing against the likes of Google, Microsoft, Oracle and others. “Leading a behemoth in its space won’t come as a huge shock,” he added.

Robin Gaster is public policy scholar at George Washington University and author of a definitive work on Amazon, ‘Behemoth — Amazon Rising: Power and Seduction in the Age of Amazon’. He believes that there will be changes, albeit imperceptible at first.

“I am absolutely not a fan of the great man theory of history,’ he said. “However, Bezos is something of the exception: if Amazon is a machine for making more Amazon, as Benedict Evans said (and I agree), then Bezos was the architect of that machine. Not of course in every detail, but he has been remarkably prescient in many ways, and deserves a lot of the credit for what Amazon has become.”

He says that Bezos leaving will not perhaps affect day-to-day operations, but it will impact strategy and the bets Amazon is going to make, if indeed that is a function he is going to relinquish. Jassy taking over was inevitable as soon as Jeff Wilke — Amazon’s head of consumer operations — decided to leave.

“This is a test of the corporate culture to see whether it can continue to function at a very high level without the direct intervention of Bezos,” he said. “It's a test also to see whether the embedded culture is now self-sustaining, though this again depends on how far Bezos steps away. I suspect Amazon will pass both tests — cultures and flywheels do not fall apart that quickly, so we may not even know for 5-10 years."

Related Article: How Amazon's Just Walk Out Tech Will Change Shopping

The Cloud Market

There are wider market implications to the move too, according to Josh Perkins, field CTO at Chicago-based AHEAD. AWS, he said has held a first-mover advantage for quite some time and have defined the market to a great extent.

He points out, though, that like any first mover their rate of growth will decline as additional competitors mature in their space. Microsoft and Google have dramatically improved their service offerings and leveraged their existing enterprise relationships to fuel tremendous growth over the past couple of years. “While AWS continues to drive innovation with new offerings, broad adoption for each will become increasingly difficult. I expect that AWS will continue to be an engine for Amazon's broader profitability well into the future,” he said. This is particularly true given that the business will now be run by Andy Jassy.

He added: "AWS was born out of Amazon's own needs and its commercialization was market-defining. The move makes sense in that Andy's track record is well-aligned to Jeff's vision and unflinching commitment to innovation as the focus for the future of the company that he founded."

Increasing Cloud Focus

It is even likely that Amazon’s focus on its cloud business will intensify. With Andy Jassy stepping into Amazon’s CEO role, Elissa Livingston, SVP of growth and strategy at Rochester, NY-based CloudCheckr says she expects the company to maintain, if not accelerate, an already intense focus on its fast-growing cloud business. The cloud has dominated this past year in the age of remote work, and Jassy’s elevation to CEO signals Amazon’s belief in investing in its offerings, go-to-market and building an ecosystem around AWS.

Broadening partner strategies to accelerate market growth is now the standard among cloud giants and enterprise software. Symbiotically, partners can help the growth of cloud giants just as cloud giants can help the growth of partners.

“It is imperative that Amazon (and Google and Microsoft, alike) continue to prioritize its AWS ecosystem and partnerships in support of its continued growth,” she said. Partners scale and amplify cloud provider initiatives to meet ever-changing, increasingly complex customer needs. Strong visibility and engagement with partners will drive innovation as the new future of cloud computing dawns.”

Digital Transformation Platform

Mountain View, Calif.-based Workato co-founder and CEO Vijay Tella, who previously founded TIBCO and was a senior executive at Oracle, believes that "Bezos’ approach to innovation at scale ("the Bezos way") has become mainstream in the world of business, with more companies applying his principles to build amazing companies.

“I'd say a lot of how we do things at Workato — our core operating principles — may trace back to the Bezos way via Gong, Netflix, and our own experiences,” he said. “This changing of the guard marks the point where Amazon will be known foremost for being the dominant platform for digital transformation rather than for being the company that totally transformed retail. The platform is now the product. Already, AWS accounts for 52% of the operating income of Amazon and most of its market value, not its retail.

Tags

Featured Research

Related Stories

woman holding a green plant in her hands

Leadership

Why Soft Skills Matter and How to Develop Them

series of empty office  chairs  and monitors

Leadership

How Employers Can Convince Women a Return to Work Is Worthwhile

painting with water colors

Leadership

How Creativity Fuels Digital Transformation

Register Now: Digital Workplace Experience Summer Session

DWX21 - Q1