Andy Jassy will have big shoes to fill when he takes over from Amazon CEO Jeff Bezos later this year. The chicken wing lovin’ 53-year-old tech executive also will face a host of challenges — from a labor force issues to a sprawling empire of disconnected businesses to intense government scrutiny.
But one longtime partner thinks there’s an even bigger challenge staring Jassy right in the face. And it connects directly to Jassy’s current day job of leading Amazon Web Services, the cloud juggernaut that earlier this week disclosed a mind-blowing $13.5 billion in operating profit last year. (As GeekWire’s Todd Bishop noted, that figure accounted for more than 63% of Amazon’s entire operating profits for the year),
Here’s the big hurdle: AWS customers in retail, healthcare, finance and host of other industries are fearful that Amazon is going to enter their industries.
That’s the takeaway from Orion Hindawi, the co-founder and CEO of fast-growing cybersecurity company Tanium.
“I think AWS has a challenge,” said Hindawi, who was speaking at a virtual event Thursday hosted by the Washington Technology Industry Association.
As Hindawi sees it, many businesses increasingly feel as if they can’t lean on AWS, when the larger Amazon entity may be entering their specific market. “They feel scared,” said Hindawi. “And that’s a problem because Microsoft has no intention to get into the petrochemical business.”
Tanium re-located to Seattle from the San Francisco Bay Area last fall, and the $9 billion cloud security company works with a number of marquee customers flushing out cybersecurity threats. In talks with those customers, Hindawi said many are weighing options, fearful of what Amazon may do. It’s also noteworthy that Tanium’s own cloud-based security product is built on the back of AWS.
“I think Andy (Jassy’s) first challenge may be to figure out how to disintermediate the threat that Amazon Corp. may pose to somebody versus the benefit that AWS may bring to somebody. Look, we just built a whole cloud infrastructure at Tanium. We chose AWS as the first partner we work with. They really do have structural advantages in a lot of cases as someone who is operating a cloud infrastructure, on our side. But you have to believe that you are not strengthening an opponent, and I think a lot of our customers still aren’t sure. I think it is a really interesting problem for him.”
That argument may sound familiar. After all, Microsoft CEO Satya Nadella made a similar case at a virtual event in December.
“No customer wants to be dependent on a provider that sells them technology on one end, and competes with them on the other,” Nadella said. “It’s never been more important to get this equation right.”
AWS — as the last year’s results prove — has been a cash cow for Amazon. And if Microsoft, Google and other rivals can make inroads, that would be a vexing problem for Jassy as he takes the helm.
Even still, AWS is running pretty strong in the cloud as the below chart indicates.
We’ll have more from Hindawi’s talk — moderated by Madrona Venture Group’s Matt McIlwain — in the coming days on GeekWire.