Jeff Bezos, whose competitive zeal made Amazon a dominant force in the world of online retail, will step down as CEO this summer and turn over the reins to Andy Jassy, who runs the cloud computing business.
One of the world’s most powerful business figures and also one of its wealthiest, Bezos will transition to the role of executive chairman.
Tuesday’s surprise announcement came as Amazon reported record fourth-quarter sales that topped $100 billion for the first time.
“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive,” Bezos, 57, said in a statement. “When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Like Facebook’s Mark Zuckerberg, Bezos is closely associated with his company’s brand.
Since founding Amazon as an online bookseller nearly 30 years ago, he has expanded into selling just about anything you can buy. On his watch, the company grew into a $1.7 trillion retail monolith that employs more than 1.2 million workers.
“Amazon is big simply because it has given customers what they want. To grow it had to take share from other giants of retail, some of which were once seen as unassailable,” Neil Saunders, managing director of consultancy GlobalData Retail, said in a statement.
Among Amazon’s biggest success stories is its cloud computing business, which launched in 2006 led by Jassy, who has long been viewed as Bezos’ heir apparent. Jassy’s ascension was made possible in August when the company announced that another possible successor, Jeff Wilke, would soon retire.
Amazon Web Services grew out of its move to rent infrastructure online to other tech companies wanting to sell products on Amazon.com. Today it’s Amazon’s most profitable division.
Amazon lays claim to about 45% of the global public cloud services market. Microsoft has 18%, Alibaba 9.1%, and Google 5.3%, according to Gartner Research. Amazon Web Services is now a $51 billion annual business for Amazon, the company said Tuesday.
“I don’t think any of us had the audacity to predict it would grow as fast as it did,” Jassy told Marketwatch in December 2019.
If anything, the COVID pandemic has intensified business reliance on cloud computing, Jassy recently told CNBC.
“I mean if you look at the history of the cloud, I have a feeling that the pandemic will have accelerated cloud adoption in the enterprise by a few years,” Jassy said.
In a letter to employees, Bezos said that as executive chairman he would focus on new products and early initiatives. Amazon’s new leader has his “full confidence,” Bezos said.
Bezos is not the first major internet figure to step aside. In 2019, Larry Page and Sergey Brin left their executive roles at Google’s parent company Alphabet.
Like Bill Gates, who began his shift away from Microsoft in 2000 but stayed on as chairman until 2014, Bezos is likely to remain an influential figure at Amazon.
Though Bezos stepped away from the day-to-day workings in recent years, dabbling in other ventures from a private space company Blue Origin to The Washington Post, he became more involved again last spring during the pandemic.
“Jeff will be the executive chair on the board. He will be involved in many large … important decisions: acquisitions, things like strategy and going into grocery and other things. Jeff has always been involved in that and that is where he will keep his time focused on his new role,” Amazon’s chief financial officer Brian Olsavsky told investors.
Tim Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business, said the transition may free up Bezos to focus on his other passions.
“In one way, I think it might be freeing for him to have the space to personally innovate again, without having to manage the rest of the company,” Hubbard said in a statement. “Given the recent successes at Amazon, especially during the pandemic, it’s going to be hard to disrupt their momentum.”
