Rise of AWS and IT as a Service
It seems natural that Amazon's next CEO is the driving force behind the company's most successful business. AWS officially launched in 2006 -- roughly four years before Microsoft Azure debuted in 2010. Within the IT services, software and hardware markets, AWS inspired multiple market transitions, disruptions and evolutions -- such as:- Rise of Public Cloud MSPs: Leading consulting firms and global systems integrators have transformed into public cloud MSPs focused on AWS, Azure and/or Google Cloud.
- Pressure in the Enterprise: Hardware and software giants such as IBM, Oracle and Hewlett Packard Enterprise have had to pivot multiple times to either build their own clouds (Oracle) or hedge toward a multi-cloud/hybrid cloud strategy (IBM and HPE). Former IBM CEO Sam Palmisano famously downplayed the cloud's potential impact roughly a decade ago, and IBM spent too time acquiring its own stock rather than innovating around subscription services.
- Rethinking of Distribution: Distributors have either competed, cooperated (or both) with the Amazon Marketplace -- especially as shrink-wrapped software and hardware appliances shifted toward virtualized services. The silver lining: Distributors realized they had to roll out cloud marketplaces, much in the way that big box retailers (Target, Home Depot, etc.) evolved to counter Amazon's e-commerce services.
Amazon and AWS: Overall Revenues
Fast forward to present day, and Bezos is stepping down during a dominant period for Amazon. For Amazon's fourth quarter of 2020:- Net sales increased 44% to $125.6 billion.
- Net income rose to $7.2 billion, up from $3.3 billion in Q3 of 2019.
“Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more. 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. 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.”
Amazon's Critics Raise Worker Safety, Diversity, Inclusion, Antitrust Concerns
Still, Amazon's dominance also faces key question marks -- spanning everything from front-line worker safety during the COVID-19 pandemic to fair wages, diversity and inclusion, and potential antitrust investigations.Answering its critics on some fronts, Amazon in its February 2, 2021, earnings release said:- It is working to ensure that its front-line employees receive vaccines as soon as possible.
- More than 700 employees are now tested every hour, and Amazon’s dedicated COVID-19 labs have processed more than one million tests globally.
- The company invested $2.5 billion in additional front-line employee pay in 2020.
- Amazon offers a starting wage of at least $15 an hour.
- All full-time employees also receive healthcare and full benefits from their first day on the job.
Big Tech CEO Transitions: Not Easy, But Jassy Appears Prepared
Meanwhile, Amazon without Bezos at the helm seems unimaginable. And in the tech industry, CEO transitions from dominant founders to next-generation leaders often don't work out.Notable CEO moves that either missed the mark, fell short or reversed course include:- Microsoft's CEO transition from Bill Gates to Steve Ballmer in 2000;
- Dell's CEO transition from Michael Dell to Kevin Rollins in 2004 before shifting back to the founder's leadership; and
- Salesforce's brief co-CEO model in 2018 before Marc Benioff resumed a solo-CEO role for the SaaS company.
