Bezos successor shows importance of cloud to Amazon's future

Jeff Bezos' pending successor as CEO at Amazon speaks volumes about how the e-commerce and cloud giant has evolved over the last decade.

Bezos founded the company as an online bookstore in 1994. But as he steps into the executive chairman role in September, his successor will be Andy Jassy -- CEO and founder of the Amazon Web Services cloud services business.

The Jassy pick shows just how important and dominant the cloud business is to Amazon’s future.

AWS has become the profit machine of Amazon -- just look at the parent’s company’s financial report for 2020 released alongside the bigger news. Cloud may still take up the smallest share of sales at around 12 percent, but was 59 percent of the operating income last year.

Keeping the overall corporation’s growth is one challenge for Jassy. He will also now be the one to lead Amazon through the standup of its second headquarters right here in Greater Washington, D.C.

Jassy will obviously still have a hand in AWS, as hinted in his memo to employees. Bezos will still have a hand in things as executive chairman. There will inevitably be news on who will succeed Jassy at the helm of AWS.

We at WT of course focus on public sector, which Jassy bucketed into what he called the “meat of enterprise cloud adoption (that is) starting to happen now.”

Some of that adoption has been in the works for some time. But the coronavirus pandemic is likely to speed that up even more given the fast growth in the number of remote workers.

That is at least the thinking of Teresa Carlson, who leads AWS’ worldwide public sector business. In fact she said such in June of last year at the AWS Public Sector Summit, which went virtual due to COVID-19.

Carlson late last year saw her role expanded beyond government. She now also oversees AWS’ work with customers in highly-regulated sectors such as financial services, energy, telecommunications, and aerospace and satellites.

AWS’ apparently evolved approach to linking public sector work with certain private sector markets is much like other global technology and professional services companies we cover, particularly the consulting firms. Another reminder that Amazon never views anything as done and dusted despite holding the cloud market's heavyweight belt. They always look for gaps within and outside of themselves.

In watching some of the general business media coverage for the past 24 hours -- CNBC for the most part -- it’s striking to hear the retail business almost being described as a side hustle of Amazon even if cloud is the smallest piece of business.

But cloud is arguably the most important piece of Amazon’s business now given so much of the innovation starts internally at AWS, which was started initially for the retail side of the house. Not that anyone asked, but I agree 100 percent with what CNBC’s lead technology anchor Jon Fortt said here, and also here, about that subject.

Jassy has spoken of Amazon’s approach as “trying to build relationships and businesses that outlast all of us in this room.” He will get that chance come later this year to do more of that, but with every piece of Amazon.