For a company that has had a single CEO for the 27 years of its existence, July 5th marked the beginning of a new era. Jeff Bezos officially stepped down from his role as Amazon’s CEO.
He has been succeeded by the former head of Amazon Web Services, Andy Jassy. On the investor relations portal, Jeff Bezos is listed as Executive Chair. Bezos’ exit as CEO was initially announced at a shareholder meeting in May.
Since its inception in 1994, Amazon has come a long way from selling books online. The company survived the dot-com bubble burst that occurred in the late 90s, to eventually play a significant role in making the Internet what it is today through Amazon Web Services. Amazon controls a major portion of e-commerce in the U.S. and Europe.
Jassy joined Amazon in 1997 directly after graduating from Harvard Business School. He has headed Amazon Web Services (AWS) ever since its formation in 2003 and has been crucial to its success. The current head of Salesforce Tableau, Adam Selipsky, will be stepping into Andy’s shoes to run AWS.
This year, AWS reported 13.5 billion dollars in revenue for the first quarter, which represented 28 percent growth compared to Q4 of 2020. The revenue accrued from AWS accounted for 12 percent of Amazon’s total revenue and 47 percent of Amazon’s overall operating income.
“During COVID, we’ve seen many enterprises decide that they no longer want to manage their own technology infrastructure. They see that partnering with AWS and moving to the cloud gives them better cost, better capability, and better speed of innovation,” Brian Olsavsky, CFO at Amazon, said during an earnings call with investors, as reported by Parkmycloud.com.
“We expect this trend to continue as we move into the post pandemic recovery. There’s significant momentum around the world, including broad and deep engagement across major industries,” he continued.
AWS is the clear leader today in the global cloud services market. According to a market share breakdown by Canalys, the worldwide cloud market grew by 35 percent this quarter to a whopping 41.8 billion dollars as of April 2021. AWS holds the biggest stake with a market share of 32 percent. Microsoft’s Azure follows with 19 percent, while Google holds 7 percent.
Jeff Bezos stepped down after placing Amazon on the path of rapid expansion. Apart from its dominating presence in e-commerce and cloud computing, Amazon has been venturing into new business sectors. In the consumer tech market, Amazon boasts products such as the Kindle, Ring, Echo, and Eero.
Following its acquisition of Whole Foods and the launch of Amazon Fresh and Amazon Go stores, Amazon has expanded substantially into the physical retail segment. Amazon recently made the biggest acquisition in the history of the entertainment business through the purchase of television and movie company MGM for 8.45 billion dollars. The Healthcare and fashion segments are also prime targets for the company.
On the other hand, Bezos has been under scrutiny for Amazon’s labor practices. In an article in March, The Verge reported about Amazon’s harsh working conditions, in which employees were struggling to keep up with demanding productivity targets.
The former CEO has also come under fire, with a recent ProPublica investigation alleging that billionaires “pay little in income tax compared to their massive wealth — sometimes, even nothing.”
In addition, on July 20, Bezos and his brother will be joining a crew bound for space on the New Shepard, a rocket ship built by his space company, Blue Origin. In a post on Instagram, Bezos said, “To see the Earth from space, it changes you. It changes your relationship with this planet, with humanity. It’s one Earth.”
Bezos could be impacted by a proposed one percent annual wealth tax on financial tangible assets, exempting the first one billion dollars of the asset’s value. Given that Bezos is worth over 200 billion dollars, the new tax policy could force him to pay two billion dollars in taxes every year.