Andy Jassy: Amazon's $6 Billion Man
Amazon has built its entire business around the idea of moving quickly. Andy Jassy, senior vice president of Amazon Web Services, has taken this philosophy to a whole new level.
Jassy, who founded Amazon Web Services (AWS) in 2003 with a team of 57 people, has built a $6 billion-plus run-rate business with more than 1 million customers in 190 countries in less than a decade. That's even more impressive considering that Amazon itself was only a $5.26 billion business after nine years.
So just how fast is Jassy reshaping the computing landscape? Salesforce.com, often characterized as a cloud computing pioneer, took 16 years to reach the $6 billion run-rate mark. Deutsche Bank estimates that AWS is nearly 10 times the size of Microsoft Azure, its closest competitor, which launched five years ago.
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Jassy, who grew up in the New York suburbs and is a die-hard Big Apple sports fan, likes to think of AWS—which has legacy enterprise vendors scrambling to play catch-up—as the underdog equivalent of the New York Giants beating the favored New England Patriots in the Super Bowl, not once but twice.
In fact, Jassy sees similarities between the sneak attacks that both the Giants and AWS have executed on the competition. "I'm not sure that people would have guessed that AWS would have been the pioneer and the strong leader in the infrastructure technology space," Jassy told CRN in a recent interview at Amazon's Seattle headquarters.
"Lots of companies and teams can fill whiteboards full of ideas and possibilities, but at the end of the day, where the rubber meets the road is being able to execute on those ideas in a way that customers care about and that resonates, and then continue to evolve that offering."
AWS was an underdog in the computing space when it launched a platform of compute, storage, database and application services in 2006 that customers could rent by the hour and access over the Internet. Legacy enterprise vendors had long talked about delivering these kinds of services, but AWS, under Jassy's leadership, beat them all to the punch.
These days, given AWS' marketplace momentum, it's getting harder to paint the fast-growing business unit as an underdog. AWS generated $1.57 billion in sales and $265 million in profit in its fiscal first quarter—the first in which Amazon broke out results for the unit.
AWS followed that up with an even better performance in its fiscal second quarter, with revenue growing 81 percent year over year to $1.82 billion, and profit of $391 million compared with $77 million in last year's quarter.
Some enterprise vendors, like IBM and VMware, have tried to dissuade their partners from working with AWS. But Jassy told CRN it's time for solution providers—some of whom have found it difficult to align with AWS—to get on board.
"I totally understand—it's a hard decision for companies who have been successful in a different model to decide to embrace a newer model. But once you realize that model is succeeding, it's important for your future to do so," he said. "But when there's a big shift going on, you can howl at the wind all you want, but if the shift is going to happen because it's good for customers, it is going to happen."
Amazon faced a similar dilemma in its retail business when it decided to let third-party vendors sell products in its online marketplace, Jassy said. Although doing so was a major strategy shift—and one that risked upsetting its existing business partners—it ended up working out. Today, he said, third-party products make up around one-third of the products listed on Amazon.com.
"We did it both because we knew it was better for customers—because it gave them more selection and better choices on prices—but also because we realized you can't fight gravity," Jassy told CRN. "In any kind of big shift, you're better off embracing the change and trying to figure out how to be a part of shaping it than having it end up shaping you and having to chase it."
It's Jassy's job to monitor the market for near-term and long-term threats and to make sure AWS remains hungry despite its huge lead in the cloud market. As the public face for AWS, Jassy takes the stage at events to explain how new AWS products and services will benefit customers. As chief of the industry's most successful cloud vendor, Jassy is also a kind of ambassador for technology that, despite all its hype, is still in its early stages of industry adoption.
"What strikes me about Andy is his extreme focus," said Jeff Aden, executive vice president of marketing and strategic development at 2nd Watch, a Seattle-based AWS partner. "He's genuine, authentic and self-aware, and he's able to articulate the value of caring for the customer and being an advocate."
"We truly believe that cloud computing would be drastically different today without Andy Jassy's foresight, customer passion and ability to execute," said Garret Carlson, director of strategic alliances at Seattle-based AWS partner Slalom Consulting.
"AWS, under Andy's leadership, has recognized the value the channel provides to the cloud customer, and that having a strong partner ecosystem will help AWS grow faster," said Luis Benavides, founder and CEO of Day1 Solutions, an AWS partner in McLean, Va.
How It All Began
In the early 2000s when Amazon started providing ecommerce technology to Target and other third-party retailers, the company realized it had to decouple many components of its platform in order to expose them to customers through application programming interfaces (APIs), Jassy said.
Amazon then started requiring business teams to communicate with each other exclusively through "hardened, well-documented APIs," which saved time and significantly accelerated its own product development, according to Jassy.
"The experience of having to deliver to customers in decoupled APIs—which was way harder than we thought it was going to be—really changed the way we thought about software," said Jassy.
But a couple of years later, Amazon realized that projects were still taking a lot longer than they should have because teams were spending too much time setting up storage, compute and databases, Jassy said.
In mid-2003, Amazon realized that not only was there internal demand for these kinds of infrastructure services, but also that none of the old guard enterprise vendors were building them for the marketplace. Some time in August or September of that year, Amazon decided to create the AWS business and appointed Jassy to lead it.
Jassy had already been at Amazon for five years and had experience running a number of different business functions, including founding and running its customer relationship management team, serving as director of marketing, and writing the business plan for Amazon's music business and leading the unit as general manager.
Prior to being appointed head of AWS, Jassy had been in what's known at Amazon as a "Technical Assistant" role, working with Amazon founder and CEO Jeff Bezos.
"At the time, we called it a ’shadow role.' And it really was like being Jeff's shadow—I participated in all of his meetings, including his one-on-ones," said Jassy, who spent 18 months in the position.
"For me, it was valuable just to be able to watch how Jeff operated every day, as well as his leaders and his direct reports," said Jassy. "Jeff is an incredibly unusual leader who is unbelievably talented and I learned a massive amount during those 18 months."
The Early Days
AWS started out with a team of 57 people, a group Jassy describes as "incredibly important" to its success.
"We looked for a mix of both people who had been at the company for a while and understood our core technology. And we wanted external people who had experiences that we didn't have plenty of here inside the company," Jassy said.
CRN spoke with three early AWS engineers, all of whom described Jassy as an extraordinarily detail-focused manager with a photographic memory and a penchant for asking difficult and insightful technical questions.
Peter Cohen, who joined Amazon in 1997 as director of software development and was a founding member of the AWS team, said the pace during those early days was intense.
"We started from zero and had to define and start building a bunch of products, and then hire a bunch of people. It felt like for a year or two, we were just interviewing people during the day and then writing and reviewing documents all night," Cohen said in an interview.
"Andy comes across as pretty laid back, but he's also pretty relentless. He's got a bit of a perfectionist streak and high standards. He will not let something go if he believes it needs to happen," said Cohen, who left Amazon last June and is now an adviser, mentor and investor in early stage virtual reality and cloud companies.
Jassy, who got both his undergraduate degree and MBA from Harvard University, impressed the AWS team not only with his business acumen, but also with a deep level of technical knowledge and clear business priorities, according to Cohen.
"Andy put operational excellence first and foremost at AWS and he did it very early—operating well had to be priority zero," said Cohen. "This was a new thing for Amazon because it hadn't offered technology to third parties before. If the services weren't available, we wouldn't have anything to sell, and we wouldn't stand out as a place that people would trust."
James Hamilton, a vice president and distinguished engineer at AWS who joined in 2008, said Jassy requires business managers to thoroughly articulate the benefits of the products and services they're in charge of developing.
"Andy lives on details. He has no interest in hearing ’that's the way it's done,' or ’it's not possible to deliver in that time frame.' " Hamilton said in an email. "If it's good for customers, the inevitable next question from Andy will be, ’Why?' Then, ’Why?' again."
Hamilton specializes in running large-scale services and previously worked at IBM and Microsoft in a career spanning nearly three decades. He said answering Jassy's questions involves a detailed back-and-forth communication that ultimately leads to better, more cost-effective products and services.
"In my entire career, I have never had to respond ’I don't know' as frequently as when working with him," Hamilton said. "It's amazing how frequently we end up discovering we actually could get it done—and how quickly it was possible to deliver it."
"The speed of execution [at AWS] is intoxicating, and after 29 years of working on enterprise systems, it's been a pretty foreign experience to be constantly looking for ways to deliver more value at lower cost," added Hamilton.
Peter Sirota, who joined Amazon in 2005 and was senior manager of the engineering teams that built the AWS platform, told CRN he was immediately impressed by the depth of Jassy's vision for AWS.
"We would have long meetings going over small details like what the text on a billing page would look like for AWS. As we scaled the business, he appointed leaders to do this type of auditing," Sirota said.
"Andy isn't a micromanager, but he does inject himself into the review process to see if the product is there yet, and provides useful feedback on issues a team is seeing," said Sirota. "It's about empowering the team to get things done. He wouldn't say, ’It needs to work this way,' especially with APIs and the technical details. Instead, he said, ’I don't understand what this thing does, can you explain?'"
Amazon has a process it calls "working backwards," which requires product teams to write a press release and an FAQ document before writing any code, said Jassy. This form of communication requires thoughtful, concise communication and ensures that all team members have a clear understanding of what they're building.
"The press release is intended to help us make sure that when we're done developing a product, we've actually built something that we believe is going to matter to customers," Jassy said. "The FAQ is intended to flesh out up front all the ways you're going to build the product—all the hard decisions."
Sirota wrote the initial press release and FAQ for Elastic MapReduce, AWS' Hadoop big data analytics service, and served as general manager of the product team. He said it wasn't easy fine-tuning the documents to the point where Jassy deemed the project ready to go.
"We worked on those docs diligently to get them right," Sirota said. "Andy read those docs and asked us what are customers going to be able to do with the service, why is it useful, and how does it work? Then, we refined our answers until the team believed the service created sufficient value for customers."
Jassy said while it often takes three to five iterations of the press release and FAQ before AWS starts building a product, this groundwork eliminates the need to monitor projects afterward to ensure they're staying on course.
"Once we complete that process, we're all on the same page about what we're building and we just let the engineering teams go—we don't have to check in again," Jassy said. "This has saved us a lot of time and built a lot of ownership and momentum for our product development teams."
Jassy said one key to AWS' success is that its services are basic—they're intended to be "flexible building blocks" that developers can stitch together as they saw fit. Cohen said Jassy would jump in whenever he saw complexity creeping into products during the development process.
"Technology people tend to make things more complex than they need to be. One of the great things about AWS is that the services are actually very simple," said Cohen. "When the team was building services, Andy would say, ’Hey guys, this seems too complicated, can we make it easier for customers?' That's part of the DNA he instilled in the organization."
Jassy's former colleagues and reports told CRN he never came off as dictatorial or overbearing. In fact, despite his lofty position as head of the world's largest and most successful cloud business, Jassy has allowed some quirky traditions to flourish at AWS.
Every Wednesday, Jassy holds a meeting with AWS management that involves spending about two hours going through the operational performance data of AWS—"literally thousands of metrics on how the platform is performing," he said. That's followed immediately thereafter by a 90-minute business review.
The Wednesday meetings are no picnic for AWS leaders whose businesses aren't performing up to expectations, according to Sirota. "The meetings were pretty intense and often included making difficult decisions, or unpleasant conversations about business metrics," he said. "If a presenter wasn't prepared, things could quickly go sideways."
To take the edge off, the Wednesday meetings also feature a competition to see who can show up wearing the ugliest shirt. The winner even gets a trophy to commemorate his or her ghastly fashion sense. "I can tell you, there are some very ugly shirts in that room on Wednesdays," said Jassy. "I won it once, and I actually think I still have the trophy in my office."
No one knows who started the ugly T-shirt contest tradition, but Sirota said the fact that Jassy has embraced it speaks volumes about his approach to management. "The crazy shirts were something that helped make the meetings less stressful," Sirota said.
Jassy said AWS is also a big participant in Amazon's buffalo wing eating club, called Tatonka, which features multiple levels of membership.
The baseline Regular membership involves eating 10 wings plus five "pasty wings"—or wings slathered in the paste that forms when wing sauce sits at room temperature for a period of time. Platinum members have to eat 25 wings plus five pasty wings, and Vegetarian members must eat 100 celery sticks plus 25 pasty celery sticks, according to Jassy.
Yet despite these quirky traditions, AWS—like Amazon itself—doesn't spend too much time celebrating its achievements. With Microsoft, Google, IBM and others chasing it in the public cloud market, AWS has no intention of going into prevent defense and letting them back into the game.
"The AWS culture is one where, when there's a significant launch, or a customer decides to use the platform in a pervasive way, people will communicate about it, and people will tend to respond enthusiastically," Jassy said. "But it's also a culture where we celebrate quickly and then move on to the next initiative."
The Final Frontier
When AWS started out, instead of going head-to-head with enterprise vendors on their own turf, it decided to focus on developers and startups. While this strategy might have seemed counterintuitive at the time, Jassy said it has enabled AWS to build a large base of satisfied customers.
"We always knew that enterprises and public sector would probably be the largest absolute users of infrastructure technology, just because they have the biggest absolute spend," Jassy said. "At that time, most of the large technology companies seemed to be ignoring startups and developers. I don't know if it was because they felt like because they didn't spend a lot of money and weren't as valuable customers as enterprises or public sector."
AWS, for about the past four years, has had enterprises squarely in its crosshairs, and it has convinced some notable ones to jump aboard. Netflix, Coca-Cola, Condé Nast, Major League Baseball, Intuit and Splunk have all moved parts—or in some cases, all—of their on-premise computing to AWS.
Jassy said AWS also has "a couple thousand" government agencies and entities using its cloud, including Healthcare.gov, NASA's Jet Propulsion Laboratory, Recovery.gov, the Navy and the Central Intelligence Agency.
"We're allowing enterprises to move much more quickly, and allowing them to innovate at a time where a lot of these organizations have stopped feeling like they were able to innovate," said Jassy. "We also feel that what we're doing in the public sector and government space is changing what governments can do for their constituencies."
AWS is continually adding enterprise-focused technologies, such as identity management and access control, configuration management, a service catalog, and the ability for customers to use their own server-side encryption keys with the S3 storage service. AWS is also going after MySQL vendors with its newly launched Aurora cloud database engine.
One interesting recent addition, called API Gateway, is a tool for creating, publishing, scaling and securing APIs. The idea is to let enterprises get the same advantages from using APIs as Amazon does, thereby paving the way for faster development and innovation, according to Jassy.
"Inside your company, if you're able to offer your different services via hardened APIs that are well documented, it frees up all the other teams that want to consume your services, to use those just as building blocks, as if they're external services," Jassy said. "Once we got into that mode inside Amazon, it dramatically changed the speed with which we were able to innovate."
API Gateway is a prime example of how AWS, under Jassy's leadership, isn't just selling technology, but a whole new way for businesses to consume technology.
"Partnering with AWS has allowed us to focus more of our efforts on what we do best and not worry about the infrastructure and all the overhead that comes with maintaining it," said Kevin RisonChu, director of systems and infrastructure at Mirum Agency, a San Diego-based AWS partner.
If enterprises find that they're able to innovate more quickly by becoming more Amazon-like themselves, the public cloud market may end up being a battle for second place.
PUBLISHED AUG. 4, 2015