Jeff Bezos vs Andy Jassy: Creating the Amazon Legacy

On February 2^nd 2021, Amazon founder and chief executive officer Jeff Bezos made an unexpected announcement: he would be stepping down as CEO in Q3 and moving into the role of executive chair of the board.

Andy Jassy, who currently leads the company's cloud computing division, will take on the job of chief executive of one of the biggest businesses in the world.

So how will this transition work, and what could it mean for Amazon in the years to come?

An unexpected announcement

Bezos started Amazon from his garage in Bellevue, Washington, in 1994 and has led its development into one of the world's most recognizable and influential brands.

The company announced in February that it had just enjoyed its biggest quarter ever, with $125.6 billion in net sales during the last three months of 2020. At the same time, it confirmed that Jassy would be replacing Bezos as chief executive, an announcement that came as something of a surprise.

In a personal email to employees, the outgoing CEO said his transition to executive chair would allow him to concentrate on "new products and early initiatives", as well as other ventures like the Bezos Earth Fund and Blue Origin, his aerospace manufacturing and sub-orbital spaceflight business.

It seems then that while he’ll still have a big say in strategic decisions and the general direction the company is moving in, the responsibility for day-to-day management and operations will soon fall to Jassy.

Handing over the reins

Before Amazon can take its next big strategic steps, it’ll have to navigate the process of Bezos stepping down and Jassy moving into the role of CEO.

During an earnings call, Brian Olsavsky, the ecommerce giant's chief financial officer, said Bezos isn’t leaving but is "getting a new job". He also said the company's founder will still be involved in "one-way door" decisions - referring to major strategic moves that can't be reversed, such as acquisitions or new market expansions.

Jeffrey Sonnenfeld, professor of leadership at the Yale School of Management, told the Financial Times that Bezos was an admirer of the Microsoft succession process, which saw Bill Gates make a gradual transition from the day-to-day running of the company to a more strategic role.

As for any concerns about a problematic power shift, Charlie O'Shea, lead Amazon analyst at credit ratings firm Moody's, said there’s no reason for investors to be worried.

What does the future hold for Amazon?

While investors seem confident the change in CEO won't cause any immediate problems for Amazon, it’s been suggested that the choice of successor is indicative of how the company will evolve in the near future.

Jassy's background is in Amazon Web Services (AWS), which has become one of the biggest cloud service providers in the world. This has led some to suggest that its future could lie in technology, rather than retail.

Sucharita Kodali, principal analyst at Forrester, said it shouldn't be overlooked that Jassy, and not Jeff Wilke, former CEO of Amazon's worldwide consumer business, was chosen as the successor to Bezos. Wilke, who was once viewed as the most likely candidate to move into the CEO's chair, announced his retirement last year.

Jassy's influence could mean that tech-fuelled invention and innovation lie at the heart of the company's development in the coming years.

There's little doubt that Amazon's cloud division, which Jassy has led since its inception, will remain crucial to its business model and financial success. Expected to bring in almost $58 billion in revenue this year, according to Bloomberg, AWS generates most of the company's profits.

A key theme that will interest Amazon's investors, competitors, customers and the corporate community in general after Jassy takes over is the company's commitment to areas of its business that haven’t yet fully matured.

Whether it's gaming, drone deliveries or further development of digital devices for the home, there are many areas where this giant of 21st-century business could seek to expand its footprint while Jassy is at the helm.