Amazon CEO Jeff Bezos will become government chair of the significant on the web retailer in the 3rd quarter and be changed by his longtime lieutenant, AWS CEO Andy Jassy.

The bombshell announcement on Tuesday came as Amazon reported its fourth-quarter financials.

“When you look at our money outcomes, what you are actually seeing are the lengthy-operate cumulative outcomes of invention,” Bezos reported in a assertion. “Suitable now I see Amazon at its most inventive at any time, generating it an exceptional time for this changeover.”

Amazon saw net income bounce forty four{36a394957233d72e39ae9c6059652940c987f134ee85c6741bc5f1e7246491e6} to $a hundred twenty five.6 billion in the fourth quarter, run by a fast paced holiday procuring time that drove much more business on the web as customers averted vendors amid the COVID-19 pandemic. Internet revenue much more than doubled to $7.two billion, in contrast to $3.3 billion the quarter a single 12 months prior.

Jeff Bezos, CEO, AmazonJeff Bezos

For the total 12 months, Amazon logged $386.one billion in net income, a 38{36a394957233d72e39ae9c6059652940c987f134ee85c6741bc5f1e7246491e6} improve over 2019’s $280.5 billion overall.

Though unexpected, Bezos’ departure and Jassy’s pending ascension to the CEO occupation has been the subject of some speculation for decades. AWS is observed as a crucial driver of Amazon’s profitability, with its bigger-margin cloud products and services supporting offset intense pricing by Amazon in its e-commerce business.

Final 12 months, that speculation percolated at any time bigger pursuing August’s retirement announcement of Amazon’s retail business main, Jeff Wilke, a shift that took a single major successor probability off the desk.

AWS experienced a $forty six billion profits operate level in 2020, a increase of 29{36a394957233d72e39ae9c6059652940c987f134ee85c6741bc5f1e7246491e6} 12 months-over-12 months, Jassy reported in the course of the firm’s re:Invent meeting in December. The division benefited drastically from the pandemic as enterprises around the globe scrambled to undertake perform-from-property policies and related systems for collaboration, safe networking and other places.

“So quite a few of all those enterprises have absent from chatting to having a real prepare,” Jassy reported in the course of the meeting. “When you look back at the history of the cloud, it will exhibit that the pandemic accelerated adoption of the cloud by quite a few decades.”

Jassy joined AWS in 1997 and AWS introduced its very first professional products and services in 2006. Due to the fact then, he has created the division into a cloud computing powerhouse recognised for offering a firehose of new products and services just about every 12 months. He will make a logical option for Bezos’s successor, reported R “Ray” Wang, founder and CEO of Constellation Investigation.

“The firm is about challenging perform, carrying out impossible things, and making sure the customers receives option, value and innovation,” Wang reported. “Jassy justifies the occupation, and he is effectively acquired it.”

This guarantees that the new Amazon CEO does not crack AWS by accident, these kinds of as if Bezos took a retail outsider.
Holger MuellerVice president and principal analyst, Constellation Investigation

AWS’s critical job in Amazon’s enlargement over the decades very likely played into the firm’s selection to name him CEO, reported Holger Mueller, an additional analyst at Constellation Investigation. “This guarantees that the new Amazon CEO does not crack AWS by accident, these kinds of as if Bezos took a retail outsider,” he reported.

Bezos’s quite a few outside the house pursuits outside of Amazon include newspaper publishing and space exploration, so his departure isn’t stunning, reported Patrick Moorhead, founder and principal analyst at Moor Insights & Tactic.

“The timing was abrupt, but I suppose you will not ease people today into these things,” Moorhead reported. “Andy Jassy was the fantastic and only substitute for Bezos, offered his obvious accomplishment with AWS.”

Meanwhile, there are some very likely candidates to triumph Jassy as head of AWS, Mueller extra. These include Peter DeSantis, senior vice president of AWS world infrastructure and purchaser aid, who has labored carefully with Jassy for effectively over a 10 years.

One more probability is Matt Garman, vice president of AWS income and marketing. “Garman is the youngest and has observed the most enlargement in duties in the last two to 3 decades, so I’d guess if it is an insider, it is him,” Mueller reported.

Andy Jassy, CEO, AWSAndy Jassy

Meanwhile, a single longtime retail market observer reported he thinks the shift to appoint Jassy may well signal a shift to put even much more emphasis on AWS.

“In some way, the shift may suggest in which Amazon thinks it can make the most dollars going forward,” reported Male Courtin, head of world alliances at success computer software vendor 6 River Systems. “The success business seems to be like it is carrying out fairly effectively, but it is AWS that carries much more of its truthful share.”

With the authorities searching carefully at how Amazon and other significant higher-tech companies use their dominant market place positions, Courtin speculated that it’s possible the shift is meant to soften the firm’s graphic and deflect the government’s investigation.

“If Amazon is anxious the authorities is closing in and desires them to spin off AWS and other elements of the business, this could be a shift to pre-empt that,” Courtin reported. “Or it could be that Bezos desires to concentration on his other toys like his space method. When you have as significantly dollars as he has, the sky is the restrict as far as what you want to do subsequent.”

But handful of observers consider Bezos is completely ready to wander away entirely from the firm he started out in his garage 26 decades in the past. They believe his existence will nevertheless drastically influence the direction Amazon normally takes in any aspect of its business. It is much more very likely Bezos will comply with the route both equally Microsoft’s Monthly bill Gates and Oracle’s Larry Ellison took when they stepped down right after lengthy stints as CEOs of the companies they started.

Editor-at-significant Ed Scannell contributed to this report.

Chris Kanaracus is a news director overseeing coverage of Cloud/DevOps and storage subject areas. Earlier, he labored for Constellation Investigation, the Americas’ SAP Users’ Team, and IDG as a reporter, editor and analyst. Chris also labored at quite a few newspapers in the Northeast, starting in 1998.