UK markets close in 3 hours 56 minutes
  • FTSE 100

    7,084.82
    +68.19 (+0.97%)
     
  • FTSE 250

    23,023.30
    +16.85 (+0.07%)
     
  • AIM

    1,246.56
    +4.79 (+0.39%)
     
  • GBP/EUR

    1.1757
    +0.0020 (+0.17%)
     
  • GBP/USD

    1.3961
    +0.0052 (+0.38%)
     
  • BTC-GBP

    28,761.52
    -533.61 (-1.82%)
     
  • CMC Crypto 200

    942.19
    +12.26 (+1.32%)
     
  • S&P 500

    4,400.64
    -0.82 (-0.02%)
     
  • DOW

    34,930.93
    -127.59 (-0.36%)
     
  • CRUDE OIL

    72.64
    +0.25 (+0.35%)
     
  • GOLD FUTURES

    1,831.50
    +26.90 (+1.49%)
     
  • NIKKEI 225

    27,782.42
    +200.76 (+0.73%)
     
  • HANG SENG

    26,315.32
    +841.44 (+3.30%)
     
  • DAX

    15,643.13
    +72.77 (+0.47%)
     
  • CAC 40

    6,664.45
    +55.14 (+0.83%)
     

Who is new Amazon CEO Andy Jassy and what could his arrival mean for London?

·6-min read
Andy Jassy (AP)
Andy Jassy (AP)

It’s all change at Amazon this week as its gazillionaire founder Jeff Bezos hands over the running of his vast baby to his key lieutenant and cloud computing hero Andy Jassy.

We know he’s about to become one of the wealthiest men in the world (after all, he’s just been handed share options worth up to $214 million) but who is the new boss and what will his elevation mean for Amazon, its staff and customers in the UK?

What’s the Andy Jassy back-story?

A super-bright 53-year-old and obsessive sports fan, he is almost as hard-driving as his predecessor.

The tale of how he first came to the boss’s attention speaks volumes. When he was a fresh-faced newbie at the firm, Amazon used to host regular, highly competitive, tournaments of an American park game called broomball. Jassy and Bezos were both hard competitors and Alpha male junior ended up clocking Alpha male senior - Bezos - on the head by accident with a canoe paddle. One way to get noticed by your billionaire boss.

Professionally, Jassy sowed the seeds of his career success at one of Bezos’ interdepartmental brainstorming sessions at his home in Seattle in 2003.

Jassy had the idea that Amazon was creating world-beating computing power to run its own websites, but didn’t need all the capacity it had created. Why not sell that capacity elsewhere, and keep building it out so companies could run all their IT on Amazon’s online systems?

Bezos, who often states his belief in hiring the best people and leaving them to get on with their ideas, gave him the green light and a cloud computing giant was born.

Amazon Web Services has been followed into the web hosting space by Microsoft, Google and others, but it still has around 45% of the market.

Last year, its $13.5 billion dollar profit made up 63% of the company’s entire earnings.

Jassy, as the joke on Wall Street went, already ran Amazon before he became CEO.

What’s he likely to do with his new trainset?

Few people think he’ll change too much. Talk on the street was that, being the business-to-business guy, he’d be less devoted to the consumer-facing side of Amazon - shopping, movies, Alexa - and focus on making even more from its business clients.

Some have even speculated he may spin off AWS into a separate business - an idea that first was speculated after WalMart refused to sell products of suppliers using its cloud services. The supermarket giant deemed it a competitor retailer’s product.

However, as the months have passed since Jassy’s succession was announced, such talk has died down somewhat. While some politicians want to break up Amazon due to its power in the retail world, none have cited any conflict of interest with AWS.

Besides, Amazon is one of the most successful companies the world has ever seen, people reason, so why would Jassy risk breaking that?

As JPMorgan analyst Doug Anmuth says, both the business and consumer sides of Amazon hold very similar cultural beliefs. “As part of Amazon’s S-team for years, Jassy has still been close to the consumer business in which he started [at the company].”

Equally important is that Bezos will remain above him in the pecking order, so nothing he plans will happen without the founder’s say-so.

Bezos has said he wants to hand over the operational reins so he can focus on other projects for the group. Such “moonshots” have led to hugely valuable innovations like Alexa, but the R&D is funded by revenues from AWS - another reason not to spin off the cashcow.

What will he do about Amazon’s controversies?

As it has grown around the world, Amazon has been facing a welter of problems with competition regulators, tax authorities and customers.

Bezos, like his opposite numbers at Facebook and Google, has been attacked for destroying the livelihoods of traditional retailers attempting to compete against the Amazon machine while paying higher local taxes.

He has also come under fire in the EU for allegedly unfairly promoting its own retail products (or those of sellers using its logistics and delivery services) at the expense of other sellers on the Amazon platform.

He has also been accused in the UK of failing to do enough to prevent fake reviews on its websites which push products to the top of its search lists.

There are few signs to suggest Amazon under Jassy will be any less aggressive in its attempts to see off proposed clampdowns by regulators and politicians on such issues.

Only last week, it tried to force the US Federal Trade Commission chairman to step away from her role in an Amazon competition probe.

Jassy may, however, have to engage more with regulators under a Joe Biden presidency than Bezos did under the Trump administration.

Democrats have long been suspicious of the actions of Big Tech.

Russ Shaw, head of Tech London Advocates, the group representing technology industry’s interests in the UK, says: “He really has to watch out for Amazon’s reputational issues. The company has got so big they now really have to be mindful of their reputation as an employer.

“He has to figure out how Amazon can play nice, and what does that mean for the business model.”

Interestingly, Jassy’s wife donated to Joe Biden in the 2020 campaign and has been a small-time donor to the party and its leaders for many years.

Staff seem to see Jassy as having more EQ than Bezos, with a tendency to fire off friendly emails and encouragement. Whether that translates into better working conditions for the army of employees in its warehouses around the world remains to be seen.

What does it mean for London?

In the London tech scene, Amazon has been described as a somewhat taciturn member of the congregation.

Where other Silicon Valley giants are regular contributors to the debates and conferences that make up the local industry picture, Amazon is sometimes seen as being less present, according to Shaw of TechLondon Advocates.

He says: “We haven’t had much engagement in London from Amazon.

“Microsoft, Google, Facebook play in the ecosystem here but not Amazon. It would be great if that could change.”

Some say its European tax domicile in Luxembourg means management may not be so focused in London, but even Chinese owned Alibaba’s UK head David Lloyd is more high profile here, they say.

“There’s an opportunity for them to put a more human face on who they are,” says Shaw.

Read More

Hacker suspects of global ransomware attack make $70m dark web demand

Amazon apology after demanding London fishmonger drops ‘prime day’ ad

Travel takes off as passengers begin to board

How the London melting pot can be the ideas factory of the world

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting