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4/13/2016
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Amazon Names New CEOs: What It Means

Amazon says that promoting Andy Jassy and Jeff Wilke to new CEO roles is not a reorganization. But does this foreshadow more independence for AWS?

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Amazon has promoted two key executives into CEO roles. One of them is the prime candidate to replace CEO Jeff Bezos, if he ever decides to step aside. The other is the head of Amazon Web Services. Naming a CEO for AWS raises the possibility that Amazon sees a day when AWS will become an independent company.

In an April 7 Amazon blog post, the company said it was promoting Jeff Wilke, head of Amazon's online retail business, and Andy Jassy, head of AWS, to recognize the roles they've played in the company, and as a reward for work well done, but that the actions are "not a reorganization."

The blog post said, "We've decided it makes sense to change the titles of the leaders of those businesses -- Jeff Wilke and Andy Jassy -- to CEO Worldwide Consumer and CEO Amazon Web Services… Kudos to Andy and Jeff!"

Wilkie is the Amazon executive considered most likely to succeed Bezos.

He joined Amazon as vice president and general manager of operations in 1999. In 2002, he became SVP for worldwide operations. At the start of 2007 he was named SVP for North America retail.

He held that post for five years, then became SVP of the Consumer Business unit in February 2012. He has a bachelor's degree in chemical engineering from Princeton, and studied total quality and process improvement while pursuing his MBA at MIT.

(Image: JurgaR/iStockphoto)

(Image: JurgaR/iStockphoto)

Such a background would be useful in establishing a supply chain based on fully automated distribution centers and same-day delivery for Amazon Prime customers, two areas Amazon has been heavily committed to in 2016. It's also leased a fleet of Boeing aircraft for package delivery.

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Before his promotion to the CEO seat, Jassy was SVP for Amazon Web Services. He is the man most frequently out front at AWS's annual developer and user group meeting, Re:Invent, each fall in Las Vegas. During the year, many AWS announcements are made via the frequent blogs of Jeff Barr, AWS chief evangelist, but when it's time to explain where Amazon is placing its cloud emphasis, that's when Jassy takes the stage.

He was the first to say that AWS revenues were growing at such a rate that they could one day overtake those of the retail operation. Jassy didn't say when that might happen, but the message was clear: AWS was growing faster than its parent company.

That was at Re:Invent in November 2014, before Amazon disclosed AWS revenues in its April 2015 first-quarter earnings report. In 2015, AWS revenue amounted to $7.9 billion out of Amazon's total of $107 billion, but AWS was growing at a rate twice that of the parent company.

[For more on Jassy's perspective on Amazon's cloud forecast, read Amazon Re:Invent: AWS Takes the Next Step.]

Jassy earned his MBA at the Harvard Business School and went to work for Amazon in 2003 as an aide and chief of staff to Bezos. He was an early advocate of having Amazon re-engineering its infrastructure into a commodity scalable service using the experience it had in creating its online retail bookstore.

One of his favorite sayings is that "there is no compression algorithm for experience," a programmer's way of saying the cloud's business lessons need to be learned the hard way.

A recent Financial Times profile mentioned that he has no programming experience but doesn't let that impede him from wading into AWS technical matters. "This turns out to be a personal slogan and his way of explaining why AWS has such an advantage over later competitors such as Microsoft and Google. As a first mover, AWS has gained experience for which there can be no substitute," according to the report.

With Jassy at the helm, some financial analysts are likely to point to conflicts implicit in AWS's operations, which host Netflix operations, even though it has its own content-streaming business. Isn't that an argument to spin AWS out as a separate company? No one knows the answer, and Amazon offered no hints in its appointment of the two CEOs.

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive ... View Full Bio

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