05 February, 2021 | AtoZ Markets – Last Tuesday, Amazon (AMZN) announced that company founder and CEO Jeff Bezos will be stepping down from his position and handing over his role to Andy Jassy, the company’s top cloud executive, in the third quarter of 2021. Jassy joined the company following Amazon’s IPO in 1997 and has built the Amazon Web Service (AWS) business from the ground up for nearly two decades. Bezos will transition to executive chairman of Amazon’s board.
In the course of a single generation, Amazon has grown from a fledgling online bookseller to one of the most powerful corporations in modern history. The empire has since expanded beyond e-commerce, moving into video and music streaming to compete with the likes of Netflix and Spotify. Amazon has also led the industry charge into smart speakers and numerous other products for the home, dominating the Google unit of Alphabet (GOOGL) and Apple (AAPL). Most recently, Bezos has moved Amazon into the field of prescription drug delivery. Aside from running Amazon, Bezos is also the founder and CEO of Blue Origin, a rocket-ship builder that he plans to turn into a commercial enterprise directly competing with Tesla CEO Elon Musk’s Space X.
The ongoing Covid-19 pandemic resulted in a surge in popularity for e-commerce during the second and third quarters of 2020 due to the stay-at-home orders. This push has yet to slow down with net sales continuing to rise 44% year-over-year to $125.6 billion, exceeding Wallstreet expectations. Additionally, operating profits nearly doubled from a year ago to $6.9 billion. There has also been a growing trend among social media users on TikTok showcasing their Amazon hauls generating free publicity and pushing sales, with the generating 339.9M views.
Amazon’s Next Chapter
Naming Andy Jassy as Jeff Bezos’s successor came as no surprise to many. In fact, the market reflected as much, remaining relatively unchanged on Wednesday in pre-market trading. Jassy is successful in his own right with the AWS business sales increasing by 30% year-over-year to $45 billion in 2020. His cloud computing business also benefited from the pandemic with many businesses upgrading to his cloud services as they navigated working from home. At $13.5 billion last year, AWS’ operating profits represented 60% of the total operating profits of the company. AWS also boasts a dominant 30% market share of the cloud computing market.
With Microsoft planning to release competing products to analyse and keep track of data, Jassy’s knowledge of AWS is critical for the future growth of the company. It will be exciting to see what the future has in store for Amazon with Andy Jassy at the helm.
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