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Blockbuster news struck late this afternoon when Amazon announced that Jeff Bezos would be stepping back as CEO of Amazon, the company he built from a business in his garage to worldwide behemoth. As he takes on the role of executive chairman, his replacement will be none other than AWS CEO Andy Jassy.
With Jassy moving into his new role at the company, the immediate question is who replaces him to run AWS. Let the games begin. Among the names being tossed about in the rumor mill are Peter DeSantis, vice president of global infrastructure at AWS and Matt Garman, who is vice president of sales and marketing. Both are members of Bezos’ elite executive team known as the S-team and either would make sense as Jassy’s successor. Nobody knows for sure though, and it could be any number of people inside the organization, or even someone from outside. Amazon was not ready to comment on a successor yet with the hand-off still months away.
Holger Mueller, a senior analyst at Constellation Research, says that Jassy is being rewarded for doing a stellar job raising AWS from a tiny side business to one on a $50 billion run rate. “On the finance side it makes sense to appoint an executive who intimately knows Amazon’s most profitable business, that operates in more competitive markets. [Appointing Jassy] ensures that the new Amazon CEO does not break the ‘golden goose’,” Mueller told me.
Alex Smith, VP of channels, who covers the cloud infrastructure market at analyst firm Canalys, says the writing has been on the wall that a transition was in the works. “This move has been coming for some time. Jassy is the second most public-facing figure at Amazon and has lead one of its most successful business units. Bezos can go out on a high and focus on his many other ventures,” Smith said.
Smith adds that this move should enhance AWS’s place in the organization. “I think this is more of an AWS gain, in terms of its increasing strategic importance to Amazon going forward, rather than loss in terms of losing Andy as direct lead. I expect he’ll remain close to that organization.”
Ed Anderson, a Gartner analyst also sees Jassy as the obvious choice to take over for Bezos. “Amazon is a company driven by technology innovation, something Andy has been doing at AWS for many years now. Also, it’s worth noting that Andy Jassy has an impressive track record of building and running a very large business. Under Andy’s leadership, AWS has grown to be one of the biggest technology companies in the world and one of the most impactful in defining what the future of computing will be,” Anderson said.
In the company earnings report released today, AWS came in at $12.74 billion for the quarter up 28% YoY from $9.6 billion a year ago. That puts the company on an elite $50 billion run rate. No other cloud infrastructure vendor, even the mighty Microsoft, is even close in this category. Microsoft stands at around 20% marketshare compared to AWS’s approximately 33% market share.
It’s unclear what impact the executive shuffle will have on the company at large or AWS in particular. In some ways it feels like when Larry Ellison stepped down as CEO of Oracle in 2014 to take on the exact same executive chairman role. While Safra Catz and Mark Hurd took over at co-CEOs in that situation, Ellison has remained intimately involved with the company he helped found. It’s reasonable to assume that Bezos will do the same.
With Jassy, the company is getting a man who has risen through the ranks since joining the company in 1997 after getting an undergraduate degree and an MBA from Harvard. In 2002 he became VP/technical assistant, working directly under Bezos. It was in this role that he began to see the need for a set of common web services for Amazon developers to use. This idea grew into AWS and Jassy became a VP at the fledgling division working his way up until he was appointed CEO in 2016.
Source: https://techcrunch.com/2021/02/02/what-andy-jassys-promotion-to-amazon-ceo-could-mean-for-aws/
Google continues to bet heavily on Google Cloud and while it is seeing accelerated revenue growth, its losses are also increasing. For the first time today, Google disclosed operating income/loss for its Google Cloud business unit in its quarterly earnings today. Google Cloud lost $5.6 billion in Google’s fiscal year 2020, which ended December 31. That’s on $13 billion of revenue.
While this may look a bit dire at first glance (cloud computing should be pretty profitable, after all), there’s different ways of looking at this. On the one hand, losses are mounting, up from $4.3 billion in 2018 and $4.6 billion in 2019, but revenue is also seeing strong growth, up from $5.8 billion in 2018 and $8.9 billion in 2019. What we’re seeing here, more than anything else, is Google investing heavily in its cloud business.
Google’s Cloud unit, led by its CEO Thomas Kurian, includes all of its cloud infrastructure and platform services, as well as Google Workspace (which you probably still refer to as G Suite). And that’s exactly where Google is making a lot of investments right now. Data centers, after all, don’t come cheap and Google Cloud launched four new regions in 2020 and started work on others. That’s on top of its investment in its core services and a number of acquisitions.
“On cloud, we see how early customers are in this shift,” Google/Alphabet CEO Sundar Pichai said in today’s earnings call. “We see a large time ahead — and definitely the market dynamics and our momentum in the context of the market is the framework in which we are thinking about the scale of investments — and the pace of investments. Obviously, it’s an area in which the longer you are in, the [unintelligible] and contributes more — and economies of scale start working as well. But we are definitely investing ahead to make sure we are able to be able to serve the customers globally across all the offerings they are interested in.”
Image Credits: Google
“Our strong fourth quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year,” Ruth Porat, CFO of Google and Alphabet, said. “Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum, and we remain focused on delivering value across the growth opportunities we see.”
In today’s earnings call, Porat noted that Workspace is seeing strong growth among large enterprises, “which are signing meaningful, long-term commitment agreements.”
For now, though, Google’s core business, which saw a strong rebound in its advertising business in the last quarter, is subsidizing its cloud expansion.
Meanwhile, over in Seattle, AWS today reported revenue of $12.74 billion in the last quarter alone and operating income of $3.56 billion. For 2020, AWS’s operating income was $13.5 billion.
Source: https://techcrunch.com/2021/02/02/google-cloud-lost-5-6b-in-2020/
We’re excited to announce Group Membership for Extra Crunch. The feature allows you to easily manage seats and payments for your team through a self-service interface. If your team joins through Group Membership, you’ll also save 25% or more on annual pricing.
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Source: https://techcrunch.com/2021/02/02/save-25-with-extra-crunch-group-membership/
Amazon founder and current CEO Jeff Bezos will be transitioning to Executive Chair of the company sometime in Q3 of this year, with current AWS CEO Andy Jassy taking over the top executive role at the commerce company. Amazon announced the news alongside its earnings results on Tuesday.
Amazon initially rose after-hours as the market digested both the company’s earnings and its CEO news. The company beat on both earnings per share, and revenues. That makes it hard to untangle the market’s response to its busy set of announcements. Update: Amazon shares have now dipped into negative territory as investors had more time to parse the company’s total collection of announcements.
Amazon crushed earnings-per-share and revenue expectations in Q4 2020. So, any investor worried about the exit of Bezos from the CEO chair were given some measure of of performance-based amelioration. Amazon’s quarter was its first to break the $100 billion mark, bringing in $125.6 billion in revenue against an anticipated $119.7 billion. And, the company’s $14.09 per share in earnings was nearly double an expected $7.23.
Jassy has been identified previously as the likely successor to Bezos, after leading Amazon Web Services (AWS) to the success it currently enjoys as a leader in the cloud computing space. AWS grew its revenues by 28% in the quarter, lower than its year-ago growth rate of 34%. AWS’s net revenues expanded from $9.95 in the year-ago Q4 to $12.74 billion during the fourth quarter of 2020. Operating income at AWS scaled as well, from $2.60 billion in Q4 2019 to $3.56 billion in the most recent quarter.
Notably Microsoft’s Azure business grew 50% in its most recent earnings period.
Bezos sent an email to Amazon employees, which the company also released publicly on its blog on Tuesday following the announcement. In the missive, he says that while he continues to “find [his] work meaningful and fun,” he wants to be able to devote proper time and attention to his “Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and [his] other passions.”
Blue Origin, Bezos’ space company, has achieved a lot to date, and regularly flies suborbital missions with its New Shepard launch vehicle. This coming year will be a busy one for the space company, since it should likely begin flying people on New Shepard for the first time.
In addition to its own human spaceflight goals, Blue Origin is currently developing a human lunar landing system for NASA, in partnership with other space industry leaders. It’s also working on another launch vehicle, New Glenn, which will be a heavy-lift class rocket capable of delivering payloads to orbit. So there’s a lot going on, there, too. Bezos has previously referred to Blue Origin as the “most important work that he’s doing” because of the scale of its potential impact on the future of humanity.
Source: https://techcrunch.com/2021/02/02/jeff-bezos-will-no-longer-be-ceo-of-amazon-as-of-later-this-year/
SpaceX has once again flown its Starship spacecraft, a still-in-development space launch vehicle it’s building in south Florida. This test was a flight of SN9, the ninth in its current series of prototype rockets. The test involved flying SN9 to an altitude of around 10 km (just over 6 miles or nearly 33,000 feet). After reaching that apogee, the SN9 spacecraft altered its attitude to angle for re-entry (simulated, since it didn’t actually leave Earth”s atmosphere) and then descended for a controlled landing.
This is the second test along these lines, with the first happening in December using its SN8 prototype, the one before this in the current series. Today’s test saw SN9 reach its target altitude as intended, and saw a successful ‘belly flop’ maneuver, as well as the required propellant hand-off. This was also a successful test of the flaps on Starship, which control its angle as it moves through the air, and which alter their angle via on-board motors to do so. The landing portion didn’t go as smoothly – the spacecraft attempted to re-orient itself to go vertical for landing, but didn’t make it quite straight up-and-down, and also had too much speed going into the touchdown, so it exploded rather spectacularly when it hit ground.
Image Credits: SpaceX
SpaceX had a very similar test the first time around, with things going mostly smoothly up until the landing portion of the mission. During SN8’s flight, the Starship prototype appeared to be better-oriented for landing before touching down too hard, but it’s difficult to say too much about which was more or less successful without access to the data and the testing parameters.
Starship is designed to perform this crucial maneuver as part of its approach to reusability – the spacecraft is intended to be fully reusable, and will accomplish this with a powered-landing that includes, obviously, not the exploding component. As the company noted, however, the rest of this test looks pretty much like what they wanted to happen.
This kind of early testing isn’t expected to go exactly to plan, and the point is primarily to collect data that will help improve further attempts and spacecraft development. Of course, you’d hope to get things exactly right upon your first attempts, but it never actually works that way in rocketry. What is unusual is how public SpaceX is with its development program at this stage of testing.
The company will be back at it with another try soon. It already has its SN10 prototype set up on its launch site at its Texas facility, which is the other spaceship you see in the early part of the animation above.
