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the challenges of the Amazon relay

The reins of one of the largest companies in the world changed on July 5. Jeff Bezos leaving his position as CEO of Amazon after 27 years with the medium-term plan to travel to space on July 20 and, in the long run, to focus on Blue Origin, his space company, and philanthropic activities. At the controls of the largest e-commerce company in the world, he left what many consider his natural heir, Andy Jassy, ​​the man who had made the Amazon Web Services division strong in recent years.

A change that is surely calm, both seen from the outside and from the inside, which delves even more into the new stage of the changeover of founders that the Big Tech have faced in recent years. Of the so-called GAFAMs, only Zuckerberg (also the youngest) remains in command of the company he founded.

Jassy, ​​53, has been Bezos’s loyal lieutenant since he joined the company in 1997, just three years after Bezos founded what was originally to be an online bookstore in Seattle.

Run Amazon, with more than 1.3 million employees worldwide and $ 386 billion in revenue in 2020It is certainly not just any job. And more so when Amazon has surely faced public scrutiny for its labor policies for the first time in its history in recent times, something to which is added the challenge of investigations for abuse of a dominant position and the challenge of continuing to maintain the current advantage over your competitors. Business is booming, but so is scrutinyas the company faces a series of regulatory hurdles and organizing efforts that would test the mettle of any CEO.

But what specific challenges does Jassy have in the short and medium term at the helm of Amazon? Of course, they are not few.

Investigations into monopoly and abuse of dominant position

Andy Jassy, ​​new CEO of Amazon. Flickr

Amazon is one of the great technologies that has open processes in Congress and the Federal Trade Commission of States that will be resolved in the coming months. It is not a subject in which Amazon feels safe to have all with himAs nearly $ 19 million was spent funding lobbyists last year, second only to Facebook, according to an analysis by Public Citizen, a watchdog group that tracks spending on politics and lobbies.

Among the bills to short the monpoly that are being developed in the US House of Representatives, there is one that would restrict companies like Amazon from competing with other sellers in their own market. This would mean that Amazon would not be able to sell its own brand of Amazon Basics. on Amazon as long as it competes directly with other products sold there. For example, Amazon could not sell tools of its Basic brand if there are other providers with similar products, or that Apple could not sell its own applications in the App Store if there are third parties with the same purpose.

Leaving aside the complication of such a rule going forward, or the debate over whether it would really make sense, Brian Huseman, Amazon’s vice president of public policy, has been Amazon’s voice in defense of these regulatory possibilities, which have also threatened since the side of the European Union. “More than half a million American small and medium-sized businesses make their living through the Amazon Marketplace, and without access to Amazon customers, it will be much more difficult for these third-party sellers to publicize their business and earn comparable income. “, He said.

Jassy has some experience working with government agencies, as Amazon Web Services became a prominent military and government contractor, but antitrust policy is probably new ground.

About the monopoly, Jassy will also have to deal with the revision of the MGM acquisition proposal. to boost your Amazon Prime Video service.

Amazon’s (huge) job challenge

Amazon and its employee control policies

Jassy will also have to deal with giving good terms to the immense workforce that drives and sustains its e-commerce empire and it has drawn criticism of late. Amazon workers in the United States have not yet managed to develop a strong union, but the public weight on their working conditions – also in other countries such as Spain – is increasingly evident.

Under the direction of Bezos, Amazon aggressively fought unionization for nearly a decade. The company successfully opposed a major effort by workers at its Bessemer, Alabama centers to create their own union this year, hiring outside companies to help quell the union campaign. The result of the vote, which said no to the employee union, is nevertheless being contested.

A few months ago, an investigation claimed that Amazon delivery people came to pee in bottles so as not to waste time and thus comply with the standards that are requested. And that is surely only the most striking case.

Bezos said goodbye in his last letter to shareholders that Amazon had the challenge of becoming “the best employer in the world”, a challenge that has passed to Jassy directly.

Workers have long complained about strenuous and unsafe working conditions at Amazon warehouses, where the employee turnover rate is about 150%.

Lawsuits for plagiarizing your own customers’ products

Jassy will also have to deal with disgruntled sellers on its marketplace, where the company has been accused of mining data from third-party sellers on your platform, which he then uses to make his own versions of the same products under the Basic line.

Amazon’s own brands still represent a very small part, around 1% of sales, but their potential seems incredible for the company itself, which can make much more money selling its own products in a range that it has not stopped growing in variety.

Related to this is also the challenge of control fake reviews on Amazon, they seem runaway. Dharmesh Mehta, Amazon’s vice president of customer trust, said in a statement that the company removed more than 200 million allegedly fake reviews last year and takes seriously its “responsibility to monitor and enforce our policies.”

AWS and Microsoft’s Cloud Competition

Jassy’s pretty boy, AWS, is still Amazon’s most profitable division and also the dominant one among its competition, but it has plenty of pursuers.

According to the latest analysis by research firm Canalys, 33% of cloud spending in Q4 2020 went to Amazon. But Microsoft saw its market share grow to 20% of spending in the quarter and records an impressive 50% year-over-year growth for its Azure cloud. Google Cloud is a distant third in terms of market share, and continues to show heavy losses despite its growth.

Jassy’s big challenge will be to maintain the dominance and profitability of AWS, which fuels investment in the rest of the Amazon empire.

And we must not forget that Bezos will continue to be the boss at Amazon, even from space.

Just because Bezos isn’t CEO doesn’t mean he’s going to disappear entirely from Amazon. Bezos isn’t CEO now, but he’s still one of Amazon’s major shareholders And although he has sold part of his shares in recent months, his immense wealth is still tied to the performance of the company he founded. This is, perhaps the great challenge for Jassy, ​​is to become the manager of a company that has a clear owner and that has grown with this disposition.

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