It’s ‘folklore’ that Amazon wins in new industries


Andy Jassy, CEO of Amazon Web Services, speaks at the 2019 CERAWeek by IHS Markit conference in Houston, Texas, on March 11, 2019.

Aaron M. Sprecher | Bloomberg | Getty Images

For all the chatter that Amazon is eating away at every industry on the planet, Andy Jassy, the head of the company’s cloud division, says much of that concern is overblown.

He dismissed the “folklore” that anytime Amazon launches a new business, it’s automatically going to kill all the competition in those areas. He pointed to Amazon’s failed smartphone launch in 2014, and said that despite Amazon’s success in online payments, “PayPal seems to be doing quite well.”

“There are really only two significant industries which Amazon has disrupted,” Jassy said on Wednesday in an on-stage interview at the Goldman Sachs Technology and Internet Conference in San Francisco. He was referring to retail and technology infrastructure. “In both cases, they were models that were pretty antiquated.”

Jassy, who helped launch Amazon Web Services in 2006 and has run the cloud-computing business ever since, was responding to a question about potential conflicts between Amazon and its customers, given how many areas in which the company is investing.

For example, in health care Amazon acquired online pharmacy PillPack in 2018, putting it in competition with CVS and Walgreens, and has launched a virtual health clinic for employees that could be expanded in the future. Separately, Amazon has bolstered its consumer electronics businesses through the acquisitions of smart doorbell maker Ring and router manufacturer Eero.

Amazon’s expansion into pharmacy and groceries, with the Whole Foods purchase, has caused competitors to pull back from AWS or abandon it altogether. Kroger, Gap, Target and Albertsons have forged agreements with Microsoft Azure or Google Cloud Platform in recent years. AWS is well ahead of both companies in cloud infrastructure.

Most of these markets are “not winner take all,” Jassy said.

Within the AWS ecosystem, Amazon faces criticism for competing with partners. Various AWS databases are up against offerings from companies including MongoDB and Snowflake, which sell their products to customers that use AWS’ core storage and compute offerings. Elastic offers its cloud-based service on AWS, which has its own service that draws on the Elasticsearch open-source technology.

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