|From: Glenn Petersen||9/11/2020 11:46:28 PM|
|Bezos’s likely Amazon successor is an executive made in Bezos’s image|
Andy Jassy, the leader of Amazon’s cloud computing business, is now the clear heir apparent to Jeff Bezos after the announced retirement of the retail operations chief.
By Jay Greene
The Washington Post
September 10, 2020 at 6:00 a.m. CDT
SEATTLE — There are few chief executives more identified with the companies they run than Jeff Bezos.
But the 56-year-old Amazon founder, and the world’s wealthiest person, will one day need to pass on the reins of the e-commerce giant. And an heir apparent has emerged in recent weeks: Andy Jassy, the 52-year-old head of Amazon Web Services, or AWS, the company’s cloud computing business, who was one of two No. 2s in Amazon’s corner offices.
The likelihood of Jassy’s being Bezos’s successor increased when the other deputy, Jeff Wilke, who ran Amazon’s retail business, last month unexpectedly announced plans to retire early next year. Wilke, 53, and Jassy shared a spot in the corporate hierarchy and were both seen to be groomed for the top job, according to current and former executives who spoke on the condition of anonymity because they were not authorized to comment on the matter.
To most, Amazon is known as a massive online marketplace where they can buy books, housewares, televisions and more. But Jassy’s Amazon career is defined by his leading Amazon into a wholly new market, cloud computing, a business the company has come to dominate just as aggressively as it leads in the world of e-commerce. And the fact that Jassy is now most likely to succeed Bezos offers insight into Amazon: that the company still values high-risk, high-reward bets and is less defined by online shopping than some might think.
“Andy embodies the culture of Amazon,” said Matt McIlwain, the managing director of Madrona Venture Group, a Seattle venture firm that invests in cloud start-ups. “He has consistently demonstrated the ability to be a builder."
Amazon declined to make any executives available for this article.
Bezos has given no indication that he plans to step away from the company he created 26 years ago. But he has gradually added extracurricular interests to his portfolio — including funding space exploration, beginning a life with his new girlfriend and owning The Washington Post.
And the coronavirus pandemic has laid bare the challenges that might make Bezos less likely to give up his leadership anytime soon. On the retail side, Amazon has wrestled with shipping delays and out-of-stock items, leaving some of its customers to shop at rivals with quicker service. It has struggled to keep warehouse workers safe. Some have raised concerns that the company hasn’t done enough to protect them from contracting the virus. Even in the cloud business, Amazon has had to confront a newly vigorous rival, Microsoft, which has won contracts — including a massive one from the Defense Department — that Amazon might have handily taken just a few years ago.
Few company founders have turned their creations into global powers and remained at the helm for decades. That means there are few templates for how to make the transition, a challenge even in the most ordinary of circumstances, from an iconic founder to a new chief executive.
One example: Bezos’s fellow Pacific Northwest billionaire Bill Gates. The Microsoft co-founder spread his separation from the company over two decades. In January 2000, Gates, then 44, turned the chief executive job over to Steve Ballmer. Gates gradually shed roles at the software giant until he gave up his last official Microsoft title as a board director in March.
Moreover, moving away from a CEO whose persona is so deeply tied to the company as a founder is perilous. It took Microsoft more than a decade to reemerge as a tech leader as it forged a new path in cloud computing after long lording over the personal computing industry under Gates.
“People that are founders and this is their life, it’s hard for them to move onto their next phase,” said David Larcker, a professor at Stanford Graduate School of Business who specializes in corporate governance.
Larcker’s survey of 113 directors and 18 executive recruiters and compensation experts three years ago found that Bezos would be the most difficult CEO to replace among those of several major U.S. corporations.
Amazon is going through its own transition. More than just an online marketplace, Amazon has rapidly grown its bricks-and-mortar business, opening physical bookstores and grab-and-go convenience shops and acquiring the natural and organic foods grocer Whole Foods Market. It has created a massive logistics machine that rivals those of UPS and FedEx. And it has pushed into a raft of new businesses, including movie and television production and online advertising. One of Amazon’s leadership principles is to “think big,” and whoever replaces Bezos will be tasked with finding the next multibillion-dollar-a-year business for the company to seize.
Jassy, the executive who would be Bezos’s successor, is an Amazon lifer, having joined the company in 1997 after graduating from Harvard Business School. Back then Amazon had only a few hundred employees — it now has 876,800 workers — and it had just turned public, compared with a current market valuation of $1.64 trillion. He led Amazon’s first push outside of book sales, drawing up the plans to add music sales to the young online retailer’s remit. In the early 2000s, Jassy shadowed Bezos as his technical assistant, something of a chief-of-staff role.
“He has adopted a lot of Jeff’s personality,” said a former executive, who spoke on the condition of anonymity to converse candidly about previous colleagues. “He’s more of a creative ideas person, rather than an operations person.”
Raised in Westchester County, just north of New York City, he’s a rabid New York sports fan with an elaborate man cave for watching sports in his Seattle home. Jassy is a part-owner of the new Seattle National Hockey League franchise, the Kraken, which will join the league in the 2021-2022 season.
But Jassy isn’t deeply steeped in Amazon’s retail operations, which accounted for the lion’s share of Amazon’s $88.9 billion of sales last quarter. Wilke, as chief executive of Amazon’s Worldwide Consumer business, also helped Amazon develop its warehouse operations, where packing goods into boxes resembles assembly-line operations that had been more commonly seen in manufacturing. The overwhelming majority of Amazon’s employees work in those warehouses, or in the system that delivers items from them, that Wilke helped create.
The business with which Jassy is most identified is Amazon Web Services, the unit that pioneered cloud computing, the business of renting space and software programming for customers to run their technical operations on the company’s vast array of servers. Amazon had already developed the technology to run its own business when a group of executives, including Jassy, met during a brainstorming session in the living room of Bezos’s Seattle-area home in 2003 and proposed offering unused computing storage and service to other businesses.
“Andy pushed to get Amazon into a new business where it hadn’t been,” said a second former Amazon executive who also spoke on the condition of anonymity.
The company launched AWS three years later, with Jassy at the helm. The unit upended the business software industry, putting giants such as IBM and Oracle, which were slower to pivot their offerings to cloud services, on their heels. Amazon has come to dominate the business of providing cloud infrastructure, holding 45 percent of the global market in 2019, according to the market research firm Gartner. Companies as diverse as Netflix, Kellogg’s, Airbnb and BP run significant pieces of their computing operations on AWS.
Jassy is not a technologist, but former executives say he often dives deep into the various pieces of AWS businesses, including its controversial facial-recognition technology and its fledgling videoconferencing Chime service and breaches such as last year’s hack of Capital One’s computing operations, allegedly carried out by a former AWS employee.
While retail drives Amazon’s revenue, the cloud business fuels Amazon’s bottom line. AWS generated $3.4 billion in net income in the most recent quarter, about 64 percent of Amazon’s total profit, even though the business accounted for just 12 percent of Amazon’s sales.
Former executives say that while Bezos has been known to micromanage pieces of Amazon’s operations, particularly its retail operations and its business-making devices, he has largely left Jassy to run AWS with little interference. That may be because the business doesn’t capture Bezos’s imagination as much as Amazon’s other operations. But former executives also say it may be because Jassy has run AWS adeptly on his own.
“He’s not really that invested in AWS,” the first former Amazon executive said of Bezos. “It’s simply because he has so much trust and faith in Andy.”
It may be that Jassy’s vision for fledgling businesses is what sets him apart in Bezos’s mind. Wilke, for instance, acknowledged that he initially opposed one of the moonshot products that Bezos loves, the Kindle e-reader. He worried about Amazon’s lack of expertise building consumer electronic devices and feared that it might miss its launch date, he said in an interview with the Wall Street Journal three years ago.
“Many of the things I predicted ultimately happened. But it didn’t matter,” Wilke said. “Jeff [Bezos] at the time said, ‘It’s the right thing to do for customers.’ I disagreed and committed, and I’m very glad I did.”
The criticism of AWS, much like the criticism of Amazon as a whole, is that the business has grown so dominant that it’s sometimes accused of trampling the smaller companies that make their own niche cloud services that run on top of it. The technologies can be deeply geeky — such as data analytics or tools to automate tasks for software developers. Jassy has said the company expands into those markets because its customers have asked it to.
For all Amazon’s clout in cloud computing, Microsoft has emerged as a potent rival. The software giant has won over several retailers as customers, including Walmart, that have been reluctant to sign up for the cloud offerings of their biggest rival. And the Pentagon awarded its largest-ever cloud computing contract — a $10 billion, 10-year deal — to Microsoft last year, though Amazon challenged the decision, claiming President Trump’s animosity toward Amazon improperly influenced the contract decision.
In December, at the annual AWS conference in Las Vegas, Jassy ripped the decision as well as Trump’s antipathy toward Bezos.
“When you have a sitting president who is willing to share openly his disdain for a company and the leader of that company, it makes it really difficult for government agencies, including the DOD, to make an objective decision without fear of reprisal,” Jassy said at the time.
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|From: Glenn Petersen||9/16/2020 11:35:37 AM|
|Amazon planning small delivery hubs in suburbs|
BY CELINE CASTRONUOVO
09/16/20 10:11 AM EDT
Amazon is seeking to boost its delivery network by installing 1,000 small delivery hubs in cities and suburbs around the U.S. in an effort to provide same-day delivery services, Bloomberg reported Wednesday.
People familiar with the plans told Bloomberg that the facilities will make online shopping almost as quick as a trip to the store. The move will also help Amazon compete with companies like Walmart and Target, which have already started offering same-day delivery of online orders.
The proposed expansion, which will eventually see a total of about 1,500 Amazon facilities, comes after Amazon faced challenges fulfilling its two-day delivery pledge earlier this year when customers flooded the company with orders amid COVID-19 lockdowns.
Bloomberg reported that while Amazon had previously avoided competing with Walmart and other suburban chain companies, CEO Jeff Bezos is investing billions of dollars in rapid delivery services as the busy holiday season approaches.
Amazon declined to respond to Bloomberg’s questions on the expansion plans but mentioned that the e-commerce company has said its last-mile delivery efforts are meant to supplement, not replace, its long-time partners.
“Our dedicated last-mile delivery network just delivered its 10 billionth package since launching over five years ago, and we’re proud to provide a great service for our customers," an Amazon spokeswoman told The Hill.
The world’s largest online retailer announced Monday that it would be hiring an additional 100,000 workers. It also announced 33,000 job openings earlier this month, primarily in its corporate and technology divisions.
With a spike in online orders during the coronavirus pandemic, Amazon saw its revenue shoot up by 40 percent in the last quarter and recorded high profits, according to Reuters.
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|To: Glenn Petersen who wrote (164132)||9/16/2020 2:15:28 PM|
|From: Sr K|
|A few months ago I could see the expansion of lockers choices, which at first was at Whole Foods, then at 7/11s. In addition to delivery, or non-one day delivery, This added 100s more, whatever was more convenient. You can see it on the checkout page, by area. |
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|From: Glenn Petersen||9/17/2020 5:03:04 PM|
|Trump says Amazon costs the USPS ‘billions,’ but internal docs tell a different story|
PUBLISHED THU, SEP 17 20204:20 PM EDT
Annie Palmer @ANNIERPALMER
-- President Donald Trump has routinely blamed Amazon for problems with the U.S. Postal Service, but new documents obtained by watchdog American Oversight show Amazon remains a large and lucrative customer for the USPS.
-- Amazon was the USPS’ “largest customer” in fiscal 2019, generating about $3.9 billion in revenue and $1.6 billion in profit, the documents show.
-- The relationship between the USPS and Amazon grew strained in April, amid the coronavirus pandemic, as the e-commerce giant asked the Postal Service to answer questions about its financial viability.
President Donald Trump has routinely blamed Amazon for problems with the U.S. Postal Service, but new documents show the e-commerce giant remains a large and lucrative customer for the USPS.
The USPS circulated “fact-checking statements” internally that buck Trump’s criticisms of Amazon and shed new light on its relationship with the company, according to documents obtained via a Freedom of Information Act request by watchdog group American Oversight. The documents were first reported by The Washington Post.
Trump has claimed that Amazon costs the Postal Service “billions,” but the USPS said in the fact-checking statements, circulated earlier this year, that Amazon was the Postal Service’s “largest customer” in fiscal 2019, generating about $3.9 billion in revenue and $1.6 billion in profit.
The Postal Service also countered Trump’s oft-repeated argument that it needs to raise prices to make money on deliveries, the documents show. By contrast, the USPS said it has the largest price increases “in recent history” from 2018 to 2019, including a 10% price increase for its Parcel Select service, which is used by Amazon.
“USPS would see a net contribution loss with a significant share of its package business if prices were to be raised significantly,” according to the documents. “USPS competitors could take share in these instances.”
According to the documents, the agency also expressed concern in April that, if it were to raise prices, it would “cede ground” to competitors and Amazon’s growing logistics network.
“Amazon has been aggressively insourcing volume with Amazon logistics, sending two billion-plus packages in fiscal 2019, which primarily cuts into USPS’ share,” the documents state.
A spokesperson for The White House was not immediately available to comment on the documents.
The documents provide a glimpse into the extent of the Postal Service’s relationship with Amazon, which became complicated months into the coronavirus outbreak.
Amazon relies on several carriers to deliver packages, such as UPS and FedEx, and is building its own network of contracted delivery partners. But the documents illustrate how Amazon continues to rely on the Postal Service.
The Postal Service delivered more than 1.5 billion Amazon packages, or roughly 30% of its total volume, in fiscal 2019, according to the documents.
The USPS delivers Amazon packages that are fulfilled by Amazon warehouses, known as Fulfillment by Amazon, and orders that are fulfilled independently by third-party merchants. “The majority of revenue and volume from Amazon” is through FBA, the Postal Service stated, according to the documents.
The Postal Service faced pressure from Amazon in April, as the pair were in the process of negotiating new pricing agreements. The USPS held a teleconference with Amazon on April 9, wherein Amazon voiced concerns about the agency’s “viability to them as continued shipping partner,” according to the documents,
“Amazon made it very clear that the USPS is alone, globally, among their partners in having this pricing uncertainty,” the documents state. “Additionally, Amazon is concerned that any stimulus from the Treasury will come with stipulations, causing concern and further risk.”
Amazon pressed the Postal Service to answer questions about its financial woes, which were exacerbated by the pandemic. Among the questions it asked were: “What does the USPS look like in the next few weeks, the next few months and the next several years?”
Amazon declined to comment on the nature of the company’s relationship with the USPS or what members of Amazon’s leadership were present during the April 9 meeting with the Postal Service.
“For more than two decades, Amazon has partnered closely with the United States Postal Service to invent and deliver for our customers, which has resulted in significant revenue for the USPS and thousands of American jobs,” Amazon spokesperson Rena Lunak said in a statement. “USPS continues to be a great partner in serving Amazon customers.”
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