Amazon Web Services (AWS) is undergoing a significant change in its leadership. CEO Adam Selipsky, a key figure in the company’s history, is stepping down, and Matt Garman, the current sales manager, will assume his role. Amazon CEO Andy Jassy announced this momentous transition in an internal message on the corporate site. Effective June 3rd, Garman, who has been instrumental in the success of AWS’s EC2 cloud computing division, will take the reins as the new CEO.

“We were fortunate that Adam agreed to step in and lead AWS, and has deftly led the business, while also developing his leadership team,” Jassy wrote. “Adam is now going to move onto his next challenge (after taking a well-deserved respite), and Garman will become CEO of AWS, effective June 3rd.”

Selipsky’s departure has ended an essential chapter in AWS’s history. He was among the first vice presidents that Amazon employed at AWS in 2005. He managed sales, marketing, and support for 11 years before departing to take the helm of Tableau, a provider of tools for data visualization. He rejoined Amazon in 2021 and became the helm of AWS at a pivotal era characterized by the COVID-19 epidemic and swift transformations in the technology sector.

Jassy praised Selipsky’s leadership, noting his contributions during a tumultuous time. “Adam took over in the middle of the pandemic and made the right long-term decision to help customers become more efficient in their spend, even if it meant less short-term revenue for AWS. Adam leaves AWS in a strong position, having reached a $100 billion annual revenue run rate this past quarter, with YoY revenue accelerating again. I’m deeply appreciative of Adam’s leadership during this time, and for the entire team’s dedication to deliver for customers and the business.”

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Even with these successes, Selipsky had difficulties during his term. AWS faced challenges in the quickly developing field of generative AI under his direction. The information has been reported that AWS originally intended to introduce Bedrock, a code-named generative AI model, during its annual conference in November 2022. Bedrock is similar to OpenAI’s ChatGPT. However, due to technical difficulties, the group was forced to postpone its debut. This delay has been viewed as a significant setback, as has AWS’s inability to obtain early investments in prominent AI firms Anthropic and Cohere. Even though AWS and Google eventually co-invested in Anthropic, it is said that these lost chances played a part in the decision to replace the leadership.

The news of Selipsky’s resignation coincides with AWS’s inconsistent performance. AWS’s unit sales growth fell to all-time lows in 2023, and the division was one of nearly 27,000 Amazon employees laid off due to more extensive layoffs. However, with a roughly 31% market share, AWS continues to lead the cloud industry, followed by Google Cloud at 11% and Microsoft Azure at 25%. With $9.42 billion in operating income in the most recent fiscal quarter, roughly 62% of Amazon’s overall operating income, AWS is still one of the company’s most successful segments. Furthermore, according to Jassy, the generative AI firms on AWS have reached a “multi-billion dollar run rate.”

Having worked for AWS since 2006, Matt Garman offers a wealth of knowledge to his current position. In 2016, he rose from his early role as a product manager to the position of general manager for all AWS computing services. He moved to the “demand generation” side of AWS in 2020, where he is now in charge of global sales, marketing assistance, and professional services. Garman is anticipated to lead AWS through its next stage of expansion and innovation because of his extensive operational understanding and experience as a leader.

Garman’s leadership will be essential to AWS’s ability to sustain its market dominance and propel future developments as it navigates the competitive and rapidly changing cloud industry. This is especially true in areas like generative AI, where the business hopes to establish its position further.