The head of Amazon Web Services (AWS), Andy Jassy, has been announced as the successor to Jeff Bezos, who is stepping down as CEO later in the year. 

Bezos is not leaving the company entirely as he will take on the role of executive chair. 

The decision to hire Jassy, however, is seen as logical, given how long he has been at the company and how well AWS has expanded under his leadership. Jassy joined in 1997, founding AWS in 2002, and he has been at the forefront of cloud computing for nearly two decades. 

For the fourth quarter of 2020, AWS brought in $12.7 billion, adding to the company’s record-breaking revenues. The cloud unit has been a reliable contributor for over a decade with consistent increases in revenue. The success of AWS has led many to suggest that Jassy’s appointment will usher in a new era for Amazon, with even more of a focus on cloud computing.
 
“Andy Jassy taking over signals the importance of not only AWS as the profit driver for its parent but also the role of cloud tech that will drive the growth of Amazon as a digital platform business going forward,” according to Forrester VP Allen Bonde.
 
“While consumer e-commerce is a big market, B2B is an even bigger prize. Picking a leader who is driving their main enterprise offering may indicate the future of Amazon is in fact selling more to businesses, than consumers. In general, a much bigger prize in the long run.”

Forrester’s principal analyst James McQuivey agreed, adding that it was key to avoid a Bill Gates-style handoff. The company struggled to successfully transition Microsoft into a new era following the appointment of Steve Ballmer.  

“By choosing Andy Jassy, Bezos is potentially skipping the Ballmer transition phase and moving right into a Satya Nadella mode, turning to an expert in running a cloud business, someone who understands the long-term role that infrastructure and business services will play for Amazon, even as it tries to maintain its role as a consumer innovator,” said McQuivey.

The most comparable executive change is IBM’s decision to replace CEO Ginni Rometty with Arvind Krishna. The company is splitting into two units, one cloud-focused and another that will take care of its infrastructure business. The cloud arm, which will arguably be more prominent, is built on much of Krishna work, such as the acquisition of Red Hat and its hybrid cloud strategy.

Similarly, Jassy has been the driving force behind AWS since 2002 and is arguably one of the most important figures in the mass adoption of cloud computing and e-commerce across the world. 

Recent Q3 analysis from Canalys put AWS as the top cloud provider by a considerable distance. Between July and September, the firm received more business 32% than Microsoft (19%) and Google Cloud (7%) combined. 

Google Cloud has reported a loss of $5.61 billion (£4.1bn) for the fiscal year 2020, which ended on 31 December.

The cloud business brought in revenue of $3.83 billion (£2.8 billion) and recorded a loss $1.24 billion (£900 million) for Q4 2020, Google revealed on Tuesday. This marks the first time the company has announced the operating income metric for Google Cloud.

With 2020 dubbed as the year of the cloud due to the fact it’s helped keep people connected during the pandemic, an operating loss of $5.61 billion may seem like a grim result for Google. 

However, the company also managed to deliver $13 billion (£9.53 billion) of revenue during 2020, a steady increase from $5.8 billion (£4.25 billion) in 2018 and $8.9 billion (£6.53 billion) in 2019. Despite mounting losses over the year – $4.3 billion in 2018 and $4.6 billion in 2019 – this has been attributed to investment in new data centres as Google Cloud expands its operations. 

In 2020, the cloud giant launched four new cloud regions in Indonesia, South Korea, and the US, and announced another four to come in Qatar, Spain, Italy, and France.

On an earnings call with investors, CEO Sundar Pichai said that Google Cloud will continue to invest going forward.

“The market dynamics and our momentum in the context of the market is the framework in which we are thinking about the scale of investments – and the pace of investments,” he said, adding that the cloud giant is “definitely investing ahead” in order to ensure that the company is “able to serve the customers globally across all the offerings they are interested in”.

When it comes to Google as a whole, the tech giant reported Q4 revenues of $56.9 billion (£41.73 billion) which, according to CFO Ruth Porat, “was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year”.

Porat also touched on Google Cloud’s results, adding that Workspace is experiencing strong growth among larger businesses, “which are signing meaningful, long-term commitment agreements”.

Google Cloud competitor AWS reported revenues of $12.74 billion (£9.34 billion) and an operating income of $3.56 billion (£2.6 billion) for Q4 alone. For 2020, AWS’s operating income was $13.5 billion (£9.89 billion).

The founder of Amazon, Jeff Bezos, will step down as the company’s CEO later in the year after almost 30-years at the helm.

Bezos will become the firm’s executive chair and the move will give him the “time and energy” to focus on other ventures, such as space exploration company Blue Origin, fighting against climate change, and overseeing the Washington Post, the newspaper he owns.

He will be replaced by Andy Jassy, who has been at the company since 1997 and is currently serving as CEO of Amazon’s cloud computing arm AWS. The announcement was made to Amazon employees via an internal letter.

“I’m excited to announce that this Q3 I’ll transition to executive chair of the Amazon board and Andy Jassy will become CEO,” Bezos wrote. “In the exec chair role, I intend to focus my energies and attention on new products and early initiatives.

“Andy [Jassy] is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.”

Some have questioned the timing of the move, with the majority of the world still living under COVID restrictions. 
 
“Every founder, no matter how successful, must eventually hand over the reins and Bezos has curiously chosen the middle of a pandemic to do it,” said Forrester analyst James McQuivey. “Perhaps he had this transition planned earlier and delayed it due to the pandemic or perhaps he realises that whoever leads the company past the pandemic will rightfully be seen as the leader for Amazon’s next phase.”

Whatever the reason for his departure, Bezos is leaving the company in good health. The firm’s fourth-quarter revenues broke the $100 billion mark for the first time, with the company raking in $125.5 billion between October and December 2020. 

Bezos and Amazon have both gained wealth during the pandemic, as more consumers and businesses used its services for retail, e-commerce and cloud computing. The company’s growth runs alongside one of the biggest financial crises of the last 30 years.

Amazon was founded by Bezos in 1994 and went public three years later, shortly before the burst of the dot.com bubble. As one of the few internet-based businesses to survive, it went from strength to strength, continuing to gain market share and revenue throughout the 2008 financial crisis and beyond.  

“This journey began some 27 years ago,” Bezos said in his letter. “Amazon was only an idea, and it had no name. The question I was asked most frequently at that time was, ‘What’s the internet?’ Blessedly, I haven’t had to explain that in a long while.”

Welcome to the 13th issue of IT Pro 20/20.

January always brings with it the Consumer Electronics Show (CES), which serves as a showcase of emerging technology and helps set the tone for the coming year. Although 2021’s roadshow felt a little anaemic, as it was forced online for the first time, it still did the job of creating a much-needed distraction.

A part of this month’s issue covers some of our highlights of the event. CES is always a mix of technology that seeks to break the mould, and technology that reflects the zeitgeist. We saw plenty of the usual suspects, with new PC hardware, IoT technology, and new breakthroughs in TV design capturing the spotlight as they always do. Yet a great deal of technology also sought to capitalise on the pandemic, or at least the greater emphasis on remote work.

It’s important to remember that there’s plenty of innovation going on outside of CES. January also saw the release of the Raspberry Pi Pico, an even smaller addition to the already tiny family of miniature computers. The device is built from a new microcontroller technology, boasts a wide range of programmable I/O options, and supports a wide range of peripherals. We take a look at its design and use cases to see what all the fuss is about.

While the new year has brought with it shiny new toys to play with, many of you may also be feeling that same need for change in your careers. Ongoing economic disruption has made it more difficult to transition away from comfortable work and, likewise, has forced businesses to think carefully about what roles and skills they need in order to flourish. We’ve taken a look at the current market to help job seekers make sense of what skills are in demand, and help businesses create a future-proof hiring strategy.

The next IT Pro 20/20 will be available on 26 February – previous issues can be found here. If you would like to receive each issue in your inbox as they release, you can subscribe to our mailing list here.

Amazon has announced an update to Lex, its conversational artificial intelligence (AI) interface service for applications, in order to make it easier to build bots with support for multiple languages.

Lex is the cloud-based service that powers Amazon’s Alexa speech-based virtual assistant. The company also offers it as a service that allows people to build virtual agents, conversational IVR systems, self-service chatbots, or informational bots.

Organizations define conversational flows using a management console that then produces a bot they can attach to various applications, like Facebook Messenger.

The company released its Version 2 enhancements and a collection of updates to the application programming interface (API) used to access the service.

One of the biggest V2  enhancements is the additional language support. Developers can now add multiple languages to a single bot, managing them collectively throughout the development and deployment process. 

According to Martin Beeby, principal advocate for Amazon Web Services, developers can add new languages during development and switch between them to compare conversations.

The updated development tooling also simplifies version control to track different bot versions more easily. Previously, developers had to version a bot’s underlying components individually, but the new feature allows them to version at the bot level.

Lex also comes with new productivity features, including saving partially completed bots and uploading sample utterances in bulk. A new configuration process makes it easier for developers to understand where they are in their bot’s configuration, Beeby added.

Finally, Lex now features a streaming conversation API that can handle interruptions in the conversation flow. It can accommodate typical conversational speed bumps, such as a user pausing to think or asking to hold for a moment while looking up some information.

A row has reportedly broken out within the government over cloud computing contracts given to Amazon. 

Around £75 million worth of contracts for web hosting, software and support services were awarded to Amazon Web Services (AWS) last year, according to The Telegraph.

That’s reportedly almost double the amount of the next cloud-provider, French firm Capgemini, which was awarded £42 million. This has started to create a divide within the Tory party with some concerned that the government is too dependent on one service.

Speaking at a UKCloud roundtable, Conservative life peer, Lord Holmes, said the tech giant represented  “the latest iteration of the biggest player”, adding that in regards to cloud procurement, it was being allowed to “eat the largest piece of pie”.

Lord Maude, the former minister for the Cabinet Office, also spoke out about the AWS contracts. 

“When it comes to hosting, we’ve regressed into allowing a small group, and one vendor, in particular, to dominate,” he said, according to The Telegraph. “If you take a view of the government as simply as a customer, it makes absolutely no sense for the government to be overly dependent on one supplier. No one would sensibly do that.”

AWS is only directly responsible for less than 1% of what the UK’s public sector spends on IT, but it generates around £8.7 billion in economic value. The firm is the biggest global provider by market share and recent research from Canalys suggested it received more business spend in Q3 of 2020 (32%) than its two closest rivals Microsoft (19%) and Google Cloud (7%). 

Some have pointed out that the likes of AWS are actually helping smaller UK businesses to win government contracts. According to Daniel Korski, co-founder of GovTech firm Public, it is actually helping power some of the most exciting and creative businesses in the country. 
 
“It’s tempting to set up large US cloud providers against small UK startups,” Korski said. “But that totally misses what’s actually going on. Major cloud providers are enabling a new generation of British startups to bid for government contracts as they provide a secure platform to deliver services which government trusts. Before them, startups had few chances of offering products to the government.” 
 
It is also worth noting that AWS recently signed a Memorandum of Understanding with the government to provide digital skills across the civil service and actually increase the diversity of its suppliers by helping smaller businesses to take part in these types of public sector contract. 
 
The government has also put strategies in place that prevents dependence on one supplier, in the form of a green paper published in December. However, there should also be no “outright protectionism”, according to Robert Colvile, director of the Centre for Policy Studies think tank, where gov isn’t “buying British purely for the sake of it”.  

“When you look at how important cloud computing has been to the rollout of the furlough scheme, or the expansion of Universal Credit, or the NHS’s response to the pandemic, it’s clear that the priority – as with all our procurement – should be to get the best quality at the best price,” he said.

IBM has ditched subscription-based cloud pricing in favour of a ‘pay as you go’ scheme as it continues to transform its central focus to cloud provision.

With the Cloud Pay as you Go with Committed Use model, customers will need to negotiate a certain amount of cloud usage they’d be committing to pay for month after month, as well as discounted pricing. 

IBM’s main selling point for its new cloud pricing model is that customers won’t be met with penalties for using more than is expected. Instead, customers will be charged at the normal discounted rate they’ve negotiated for their expected cloud usage.

“With this billing model, you commit to spend a certain amount on IBM Cloud and you also receive discounts across the Cloud platform,” said Amit Patel, offering management, direct sales and Haley Lucey, IBM cloud content experience.

“You are billed monthly based on your usage, and unlike a subscription, you continue to receive a discount even after you reach your yearly committed amount.”

The change comes after another mixed round of financial results for the computing giant, with a 10% surge in cloud growth overshadowed by the sharpest overall revenue decline in five years. 

IBM’s cloud business earned $7.5 billion during Q4, with revenue from Red Hat also increasing by 19%. However, this wasn’t enough to raise overall revenues, which dropped 6% between October and December. 

The pivot to pay as you go pricing is also part of a wider shift in pricing strategy, with IBM also announcing last week that it’s raised the prices of its Enterprise Plan for Db2 on Cloud programme from January 2021. 

The console user experience is also getting an overhaul, IBM says, with changes including visualisation of progress towards a cloud commitment, with ways to identify any discount, spending progress and remaining time on a commitment. 

Customers can also look at their spending break down, month by month, as well as a detailed usage dashboard for each specific calendar month.