Jeff Bezos To Step Down As Amazon’s CEO: CHANGE IN 27 YEARS-OLD LEGACY
The e-commerce giant, Amazon appalled the world with a statement it released recently!
The world’s richest man and Amazon’s CEO Jeff Bezos will step down from his position most probably in the third quarter of 2021. Well, that does not mean that the man who laid the foundation of Amazon 27 years back will be leaving it completely.
According to the New York Times, he will take up the role of executive chairman of the Amazon board. Once the announcement was made official, many business leaders like Google CEO Sundar Pichai, displayed their surprise through social media platforms.
Amazon has become a global name in today’s time. The brand presence inked by it is mainly due to the cumulative efforts and inventions done within the company since its establishment. As the legacy of Jeff Bezos as its CEO comes to an end, let us see how it all started.
Success Story Of Jeff Bezos: How Amazon Got Started?
Jeff Bezos’s college years were similar to every other kid and it was during his graduation when he had developed an interest in computer science as a subject. In fact, his interest in this area paid him quite well in life. It was the year of 1994 and 30-year-old Jeffery P. Bezos was working efficiently on Wall Street. In the spring of the same year, it was reported the usage of web increased by 2300% in the span of one year.
This amount of growth during that time could not be ignored.
Jeff Bezos began wondering how to harness that opportunity and ideate a business plan that could take direct benefit from it. He started to make a list of products that he could sell on the internet. Among the listed products he found that books would cost him the lowest and their demand never goes off the market. Well, that right there was the beginning of Amazon. Despite having a good job that paid him well, he left JE Shaw and Company, came out of his comfort zone to kickstart his own firm.
To start Amazon, Jeff Bezos primarily used his parent’s money as the initial funding for his start-up. They agreed to invest a massive portion of their life savings into their son’s new venture despite being unaware of what the internet was at that time! Now that is called some ‘support’!
So imagine this, on one hand, the world was guessing how the internet can operate and on the other hand, there was Jeff Bezos who went on to build a business around it. Amazing! Isn’t it? For almost 20 years, he remained mostly away from the limelight or the centre stage as the CEO. As a matter of fact, in one of his interviews, he has even said that the titles like ‘inventor Jeff Bezos' or ‘father Jeff Bezos’ are preferable than ‘richest man in the world’ to him.
Jeff Bezos’s Failures: It Isn’t Always A Cakewalk
When you are leading a company like Amazon, it is an obvious fact that everything at every stage cannot be merry. Ups or downs are the part and parcel of life and even the richest person in the world has made mistakes or failed.
Many times his ideas or business plans have gone down the drain despite making endless efforts. One of the examples is that of Fire Phone where Jeff Bezos ended up losing a good amount of money ($170 million). A lot of hard work was put into this project but unfortunately, the Android and iPhone version of Fire Phone could not be completed. Another business idea that did not do well includes the step to introduce a deal on a daily basis on Amazon.
If you want the list where Jeff Bezos’s ideas failed, then here it is -
- Amazon local register
- Music importer
- Test Drive
- Amazon WebPay
The bright side to this is the ideas that take off very well and go on to show splurge growth as well as popularity. They compensate for all the losses. To name a few of such projects- Amazon Prime (that helped us all to sustain through the time of pandemic), AWS, Amazon Kindle (for all the nerds out there), etc.
Who Will Be The Next CEO Of Amazon?
Most of you must be wondering how long Jeff Bezos has been the CEO of Amazon? As mentioned in the former part of the blog, it is 27 years!
Once Jeff Bezos bids his goodbye to the role of CEO, it is Andy Jassy who would step in. For those who are not aware, Andy Jassy currently serves as the CEO of Amazon Web Services. He has been a part of Amazon for 23 years now and has been nailing his role as the head of the company’s cloud computing segment.
Andrew R. Jassy is a known name in the tech industry and an integral part of the company. He joined Amazon after finishing his graduation from a Harvard Business School in 1997. During early years he took up the role of a technical assistant and he has also served as the marketing manager of the company. Andy Jassy has played a significant role in taking the company's name ahead over all these years and as a known figure of the business world, Andy Jassy believes in the reinvention for a company to survive in the long run. A sports lover and music outside of work, he partly owns the Seattle National Hockey League franchise, the Kraken.
In the year 2003, he along with a team of 57 people founded Amazon Web Services and in 2016 Andy became its CEO from the senior vice president. AWS is a firm providing APIs and cloud computing platforms to various players like governments, firms and even individuals. According to the statistics from the year 2020, he was facilitated with a base compensation worth $175,000 and 4,023 Amazon shares as a stock unit award.
Well, in my view, a veteran of the e-commerce giant is the best replacement of Jeff Bezos to serve the role of CEO. He has observed Jeff Bezos all these years and knows the company values quite well. It will be exciting to see how aptly he embraces the new role and takes Amazon to new heights. What do you think?
Amazon’s Revenue Breakdown
Amazon is one of the most valuable firms in the world and its business model has taken a paradigm shift over all these years. The main of the e-commerce giant lies in the retail segment but it is not just limited to selling goods online.
According to the statistics of 2019-20, Amazon made revenue from the following sources. For quick understanding, you can have a look at the pie chart as well.
Out of all these sources of revenue, there are three top streams. So, let us understand them one by one -
- The major chunk of the entire revenue is coming from online stores (50%). The number here is a testimony of people’s trust in the products sold by Amazon. Another school of thought that can be presented here is that due to regular innovations there are fair chances that online stores might not remain its main income source in the coming years.
- The second-largest revenue source is third-party seller services. You must be wondering what is third-party seller service? In simple terms, it tells the fees that other businesses need to pay to Amazon for accessing the customers, returns, order, etc through the online platform.
- The third source in this list is Amazon Web Services (AWS). Through AWS, Amazon makes cloud infrastructure and service available to individuals, businesses, etc. The players who avail their services have to pay the required charges for the same. In fact, for a long time, AWS was one of the top profit churning business segments of the e-commerce giant.
Highlights From Amazon’s Annual Report (2019-20)
The importance of financial reports and its analysis is known to all, especially the investors. Let us see how has Amazon performed under the leadership of Jeff Bezos in 2019-20 through the following table -
- In 2019, the revenue surged by $48 Billion or 20% as compared to 2018. The products sold through online stores contributed the most to the hike in revenue.
- Along with that, AWS and third-party seller services also added to the revenue in 2019.
- The operating income of Amazon grew by 17% in 2019 as compared to the year 2018 and it was AWS that contributed most in this growth.
- Lastly, there was an increase of 15% in the company’s net income in 2019 as compared to 2018. This implies that there was a profit of $23.01 per share.
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For any entrepreneur, his or her company is like a child. The founders nurture the business in order to take it to the heights of success. Akin is the story of Amazon!
What started as an online store to sell books, has become one of the top companies around the globe, employing around 11 lakh people. The expansion over the years helped Jeff Bezos to not only become a remarkable business leader but the richest man in the world as well. The goodbye will definitely be hard but as they say, ‘change is the only constant thing.’
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