Andy Jassy, new Amazon CEO, steps into the spotlight after building a profit machine – CNET

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Andy Jassy, set to become Amazon CEO in July, speaks at a conference in 2017. Jassy led the creation of Amazon Web Services and has spoken freely on political issues, but now must face the spotlight as head of the entire company.

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The name Andy Jassy might not have rung any bells for most people Tuesday morning, but by the afternoon, the world knew him as the heir apparent and next CEO of Amazon. Already a chief executive in his own right — if not one well-versed on the public stage — the head of Amazon Web Services and 24-year employee at the tech juggernaut will step into the spotlight to helm the company starting in July once founder Jeff Bezos transitions to the role of executive chairman.

Jassy will run a highly profitable company at a time when it has grown larger than ever, thanks in part to the pandemic. Amazon’s already enormous retail business has spent the past year scaling up dramatically to meet the surge in demand from pandemic shoppers stuck at home, and Jassy’s own cloud computing unit controls a third of the market. 

Amazon, however, also faces the scrutiny of regulators as the federal government investigates Amazon for potential antitrust violations and lawmakers like Sen. Bernie Sanders accuse the company of profiting off price spikes during the pandemic. As with Bezos before him, every move by Jassy will be under the microscope.  

How Jassy will handle this scrutiny over Amazon’s dominance, in addition to steering divisions of the company he wasn’t previously a part of, remains to be seen. He quietly built Amazon’s cloud service business into a market leader and the company’s most profitable segment. But he hasn’t faced the questions of regulators and Congress. 

His past press appearances show Jassy is comfortable speaking to controversy and conversant in Amazon’s stances on its size and dominance. But he wasn’t the person in charge of the company then. 

Now he’ll have to face critiques over a range of issues, including the company’s creation of facial recognition products; the safety and authenticity of products sold by the third-party vendors that make up about half of Amazon’s sales; its impact on the environment; and its treatment of warehouse and delivery workers. Not to mention whether Amazon has illegal monopoly power.

Jassy holds to Amazon’s corporate values

Analysts weren’t surprised by Jassy’s promotion. A seasoned Amazonian who has worked closely with Bezos, Jassy built up AWS from its beginning in 2003. In a foreword to a 2017 book about cloud computing, Jassy wrote that his team took an internal software tool developed to increase efficiency in Amazon’s engineering teams and made it into a valuable product for other businesses, too. This led to the creation of Amazon Simple Storage Service, or Amazon S3. 

Amazon didn’t make Jassy available for an interview for this story. His past speeches and writings show Jassy embraces Bezos’ ethos of going all in on a new idea, building on any success or moving on if it flops. 

“This is an astute approach to succession planning,” said Nicholas McQuire, an analyst at CCS Insight who focuses on executives. “Bezos created the blueprint for internet businesses: rapid innovation, huge scale and relentless focus on the customer,” he said, adding that Jassy is one of the few people who can replicate that formula.

“Often you’re going to have to reinvent yourself multiple times over” to build a business that will last for decades, Jassy said in a keynote address at AWS’ re:Invent conference in December  He went on to praise Netflix for “cannibalizing its own DVD rental business” when it anticipated how important streaming would become. 

Jassy’s grasp of why cloud computing became essential to businesses everywhere also applies to Amazon’s larger success story. “With the cloud, you provision what you need, scale up seamlessly when needed, and shed resources and costs when it’s not needed,” Jassy said in the foreword to the 2017 book.

It’s the kind of flexibility that’s at the center of Amazon’s ethos. 

Jassy will have to face controversy

Carrying on a corporate mantra that has made Amazon a success for shareholders is one thing. Another is facing external criticism and attempts at regulation. That same taste for scaling has put Amazon in the crosshairs for its market dominance and potential power to quash or acquire competitors.

In a 2019 interview with PBS’ Frontline, Jassy dealt with questions about whether Amazon has too much power. At the time, he said Amazon doesn’t see itself as so big, only making up about 1% of the retail sector internationally. It will be a different task to convince antitrust regulators that Amazon reaping $1 of every $100 of global retail sales isn’t astounding (and the US number is higher).

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Regulators are particularly concerned about Amazon’s private label business and its potential ability to unfairly undercut other retailers on its platform with cheaper competing products. 

Jassy has also been outspoken on political issues. As Business Insider pointed out, he tweeted in support of a US Supreme Court decision upholding employment protections for LGBTQ workers and decried high incarceration rates in the US, and he highlighted the injustice of the murders of Ahmaud Arbery, Breonna Taylor and George Floyd during an AWS re:Invent keynote address. Bezos has been less vocal on political issues, and it’s not clear whether Jassy will be able to express himself so freely now that he’ll be the face of Amazon.

Jason Schloetzer, a professor of business administration at Georgetown University, said Jassy will have to take a diplomatic approach as the face of Amazon. Still, the incoming CEO likely won’t have to give up his political stances, he said. “It seems that there is a groundswell of organizations starting to take these more public stances,” Schloetzer said. “It’s part of the movement of organizations trying to have a positive role in society, rather than just being there to generate shareholder value.”

Then there’s Amazon’s ability to control what exists on the internet. AWS commands more than a third of the cloud market. Technically, AWS could also take a lot of the internet offline. In the same Frontline interview, Jassy alluded to this power. 

“If there’s any kind of documented proof of people misusing the technology,” he said, “we will suspend people’s ability not just to use the technology but to use AWS.” 

Jassy was addressing concerns that law enforcement would abuse its facial recognition technology. But his words took on new meaning this year when AWS suspended cloud hosting services to Parler, a social media platform used during the Capitol riot on Jan. 6, for not moderating content calling for violence. 

Now Jassy will have to take heat from Congress and regulators not only as Amazon’s future CEO, but also as the owner of the decision to take Parler offline. Whether or not AWS was right to do so, he’ll have to explain what it means that it could.

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