I have no idea what went through Andy Jassy's head on his first day as CEO of Amazon. I imagine it had to be a little overwhelming. Becoming the CEO of one of the largest and most important companies on earth must be a daunting task. Never mind that he follows Jeff Bezos, who is one of the most iconic founders and business leaders, maybe ever.
Maybe, for Jassy, who took over this week as Bezos' successor, it's a little less overwhelming considering he's been at Amazon his entire career, and already led its most important business unit--AWS. Still, I doubt he'd say it's easy.
Of course, Amazon's stock did close almost five percent higher on Jassy's first day, largely due to an assist from the Department of Defense, which said it would cancel its $10 billion contract with rival cloud-computing company Microsoft, known as JEDI. Instead, the Pentagon plans to split the contract between two vendors, Microsoft's Azure and Amazon's AWS.
Amazon challenged awarding the JEDI contract to Microsoft after almost every observer expected it to go to AWS. After all, the company is the largest and most established player in the cloud-computing space. After the Pentagon upheld the award, Amazon filed a lawsuit to block the contract's implementation.
Earlier this year, the Pentagon said that delays may very well result in it pulling the plug entirely, which is what happened this week. It appears to have been a savvy move by AWS under Jassy. That the announcement came on his first day of work as CEO of Amazon must have been an especially nice gift.
Honestly, the biggest reason this is good news for Amazon isn't just because it means the company will get a piece of a $10 billion contract. That's not nothing, but, honestly, AWS is doing just fine. Under Jassy's lead, it's already the largest cloud-computing platform, and it represents the largest slice of Amazon's profit.
And sure, the money is nice, but it's not nearly the most important thing that happened. Mostly, it was a gift for AWS because it represented a body blow to its biggest, most formidable competitor.
For Microsoft, this is pretty bad. Again, not because of the money--Microsoft is also doing just fine. But growing Azure, Microsoft's cloud-computing business, has become a major focus for the company. This setback sends a signal that one of the largest, most important customers wasn't comfortable putting all of its eggs in Microsoft's basket.
What Microsoft would have gotten out of this wasn't just a hefty source of revenue, but credibility in its effort to challenge AWS. By forcing delays that ultimately led the DoD to scrap the entire thing, Amazon was able to keep Microsoft at bay, at least for now.
Amazon certainly played this as well as it possibly could. That's certainly a hardball strategy, but Amazon's argument all along was that the only reason it didn't get the contract in the first place is because President Trump was unhappy with his coverage in The Washington Post, which is owned by Bezos.
In the end, Amazon's position was rewarded, if not vindicated. Either way, it was a good first day for Amazon and its new CEO.