Tech

Amazon’s cloud unit chief to step down after three years

What you need to know more about

  • Matt Garman, who will succeed Adam Selipsky as the head of AWS, has a long-standing history with Amazon, having started as an intern in 2005 and transitioning to a full-time role as one of its initial product managers the following year.
  • He previously served as the CEO of Tableau Software, a Salesforce subsidiary, from 2016 to 2021, before returning to AWS to take over its leadership from Jassy, who transitioned to the role of Amazon CEO.

Amazon announced that Adam Selipsky, the head of its highly profitable Amazon Web Services (AWS) cloud computing unit, will step down next month after a successful three-year tenure. Selipsky, 57, who also serves as a member of Amazon’s advisory team to CEO Andy Jassy, will officially leave the company on June 3. His successor will be Matt Garman, a seasoned executive who has led sales and marketing efforts at AWS.

Selipsky’s tenure at AWS spans 14 years, with two distinct periods of service. He previously served as the CEO of Tableau Software, a Salesforce subsidiary, from 2016 to 2021, before returning to AWS to take over its leadership from Jassy, who transitioned to the role of Amazon CEO.

Garman’s appointment signals a continuation of AWS’s strategic focus on sales and marketing initiatives under new leadership. As AWS remains a key driver of Amazon’s overall profitability, Selipsky’s departure marks a significant transition within the company’s cloud computing division.

During Adam Selipsky’s tenure at AWS, the cloud computing unit experienced remarkable growth, with sales doubling from $45.4 billion the year before his appointment to $90.8 billion in 2023. Operating income also nearly doubled, reaching $24.6 billion over the same period.

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Despite these impressive achievements, AWS has faced criticism for its perceived sluggishness in rolling out competitive generative artificial intelligence services to keep pace with rivals like OpenAI. In response to this challenge, AWS recently made its Amazon Q chatbot service widely accessible for businesses. This move reflects AWS’s ongoing efforts to enhance its AI offerings and remain competitive in the rapidly evolving cloud computing landscape under Selipsky’s leadership.

On Tuesday, shares of the Seattle-based retailer showed minimal movement, dipping less than 1%. Jamie Meyers, a senior analyst at Laffer Tengler Investments, which holds Amazon shares, expressed confidence in the stability of AWS operations following Adam Selipsky’s departure. Meyers noted that Andy Jassy, who founded and previously led AWS, remains a key figure within the company. As long as Jassy continues to lead Amazon, Meyers believes that AWS operations will remain on course without significant disruption. This sentiment reflects the perception among some analysts that Jassy’s ongoing leadership provides continuity and reassurance for AWS stakeholders amidst leadership transitions within the company.

It was not immediately clear what Selipsky may do next, though he said he was leaving the company to “spend more time with family.”

Despite AWS’s significant market share in the U.S. cloud market, its dominance faces challenges from Microsoft’s rapidly expanding Azure service. Azure’s growth is bolstered by its AI offerings, strengthened by its collaboration with OpenAI. Additionally, Google, under Alphabet’s umbrella, is poised to introduce new AI services at its annual developer conference, potentially intensifying competition further. As AI becomes increasingly pivotal in cloud computing services, AWS must navigate evolving market dynamics to maintain its competitive edge against formidable rivals like Microsoft and Google.

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AWS, Amazon’s second-largest business unit following e-commerce, is often hailed as the company’s primary growth driver, contributing approximately 40% to its overall revenue. Matt Garman, who will succeed Adam Selipsky as the head of AWS, has a long-standing history with Amazon, having started as an intern in 2005 and transitioning to a full-time role as one of its initial product managers the following year.

During Selipsky’s tenure, AWS underwent several rounds of restructuring, including significant layoffs. In April, the unit overseeing sales and marketing for physical stores technology saw a reduction of a few hundred jobs. AWS faced considerable workforce cuts in 2023, with Amazon trimming approximately 27,000 positions company-wide, making it one of the most affected divisions. These strategic adjustments reflect AWS’s efforts to streamline operations and adapt to evolving market conditions under Selipsky’s leadership.

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