Amazon CEO and founder Jeff Bezos is stepping down and will transition to executive chairman’s role in the third quarter of 2021. Andy Jassy, the chief of Amazon Web Services, will be taking over. With Bezos moving out of the CEO chair, the four largest (almost) trillion-dollar companies — Apple, Amazon, Google, and Microsoft — are now helmed not by founders, but by professional managers.
“As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I’ve never had more energy, and this isn’t about retiring,” Bezos wrote in an email to his employees. “I’m super passionate about the impact I think these organizations can have.”
He isn’t the first CEO-founder to step down. Larry Ellison became an executive chairman and handed over the reins to professional co-CEOs. Bezos is following in the footsteps of another Seattle-area giant, Bill Gates, who entrusted his company to long-time collaborator Steve Ballmer. Gates then spent most of his energy on the Gates Foundation.
“I believe with great wealth comes great responsibility — the responsibility to give back to society and make sure those resources are given back in the best possible way, to those in need,” Gates told CNN in 2006, when he announced his decision to leave the CEO job in two years. “It’s not a retirement, it’s a reordering of my priorities.”
Both founders left at a time of significant transitions in the technology landscape. The advertising-based Internet and the rise of mobile platforms coincided with Gates’s exit. Bezos is leaving the company when society is transitioning to a post-industrial era enabled by data, algorithms, and extreme automation.
Microsoft’s headaches came in the shape of Google and then Apple. Amazon’s migraines are occuring at more political, societal, and humanistic levels. It is no surprise that Bezos doesn’t want to grapple with the continuous scrutiny of the press and politicians. However, unlike Gates, Bezos is leaving the company in the hands of a guy who has been crucial to building Amazon’s future (and current) profit engine. And he is an exceptional guy.
Stanford’s Graduate School of Business, in a 2017 article, pointed out:
“Visionary founders” such as Amazon’s Jeff Bezos, Elon Musk of Tesla, and Warren Buffett of Berkshire Hathaway would be harder to replace than CEOs of large, well-established public companies, the directors indicated. They said that just two people could replace Bezos, and three could replace Buffett or Musk.
I couldn’t help but notice that Amazon and Microsoft are (or will be) run by executives who made their bones in the brass-knuckled world of cloud computing. Satya Nadella ran Microsoft’s Azure business before taking over as the chief executive. Jassy has been head of Amazon Web Services, the group that started the cloud computing revolution, and has led a division that has upended the technology landscape.
“We’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics.”Jeff Bezos, Amazon founder & outgoing CEO
“We’ve pioneered two complete industries and a whole new class of devices,” Bezos noted. “We are leaders in areas as varied as machine learning and logistics.” Amazon isn’t a retailer — it is a data intelligence and logistics company. Those two areas of expertise are attached at the hip. There is virtually no industry that is not being redefined by machine learning, data, and resultant intelligence — and that includes logistics, which is how we get our same day deliveries. And perhaps that is why Jassy makes perfect sense to lead the company.
A 22-year-veteran of the company, Jassy is not very different from Bezos. He took over as CEO of AWS in 2016. During the most recent quarter (ending December 31, 2020), AWS had sales of about $12.7 billion and a profit of $3.5 billion, accounting for most of the profits for Amazon during the quarter. In an interview earlier in 2020, he pointed out that, despite its size, “when you actually dissect what Amazon is, when you look at each of the business segments, the facts are we’re really small relative to the total market segment size in each of the businesses in which we operate, and they’re still all in their very infant, early stages.”
I got a chance to meet Bezos a long time ago, when Amazon was still a startup. I met him a couple of times over the years. I was highly skeptical about Amazon’s stock price during the dot-com bubble, but I eventually came to appreciate the long-term thinking. Jassy is cut from the same cloth and is quite erudite when speaking publicly about contentious issues. And he is not the one to back down from his position — watch his interview with Frontline about facial recognition technologies and their relationship to law enforcement agencies.
He will need those skills to keep Amazon’s million-plus employees marching in the same direction. There will be plenty to contend with. For starters, there is the backdrop of increased mistrust, not just of Amazon, but of the technology sector itself. Amazon is also facing unionization, and recalcitrant politicians are baying for its blood.
February 2, 2021, San Francisco