How much should new CEO Adam Selipsky worry about his AWS staff exodus?

The Big Story

The AWS exodus

One of Amazon CEO Andy Jassy's favorite sayings during his days with AWS was "there's no compression algorithm for experience." The leading cloud infrastructure company is about to put that theory to the test.

The ground has shifted beneath Adam Selipsky since he took over the role of AWS CEO, with a wave of high-profile departures from the company since the announcement of Jassy's promotion. Some turnover is to be expected when the only CEO AWS has ever known gets kicked upstairs to the big job running the entire corporation, but the quantity and quality of the people who have decided to leave is turning heads in enterprise tech.

• Charlie Bell was the biggest name to leave the company he played an instrumental role in creating, and this week his new role at Microsoft took shape. Also this week, Ian Massingham joined fellow ex-AWS executives Matt Asay and Peder Ulander (as reported by Protocol) at MongoDB.
• Bell is well-known inside and outside AWS as one of the key engineering leaders behind its rise, and Massingham, Asay and Ulander were public-facing representatives of a company that developers and business leaders encountered when they had questions or concerns about AWS.
• They join a list of more than a dozen prominent executives as compiled by Business Insider last month to have left AWS since Jassy announced he was moving over to Amazon.

Job churn has been a broad trend over the last six months, with an incredible surge in employee turnover across the tech industry, and outside of it as well.

• The so-called late-pandemic "Great Resignation" has been primarily driven by mid-career employees in their 30s and 40s, according to a recent analysis conducted by Harvard Business Review. The hardships and compromises forced on almost all of us by the pandemic have led many of us to reconsider our relationship with work and the role it plays in our lives.
• AWS has enjoyed remarkable stability over the last decade building the cloud infrastructure and business model that redefined enterprise tech. But the company (and Amazon in general) is also well-known for paying salaries below market rates for tech talent, and it's not the easiest place to work.

So should Selipsky be worried that the departures are signs of a broader problem at AWS? Or are they the result of a backlog of job activity that would have been spread out over a longer period of time if not for the pandemic?

• There's no question that AWS faces stronger competition from Microsoft and Google than ever, and both challengers are willing to pay top dollar for talent that understands how AWS built such a successful technology platform and profitable business.
• In some cases — such as former AWS executive Teresa Carlson, who became chief growth officer at Splunk earlier this year, and Ulander, who is now MongoDB's CMO — it's not hard to see why major leadership positions at fast-growing but smaller companies would appeal.
• But there are obvious signs of cultural problems within AWS: The company has acknowledged that what employees have described as a widespread pattern of harassment and discrimination was serious enough to warrant an outside investigation.
• And the problems inherent with its parent company's operational model are unlikely to go away in short order; Jassy reiterated this week that AWS is unlikely to spin out from Amazon any time soon.

Looking at the to-do list for Selipsky that Protocol | Enterprise laid out after he was named only the second CEO in AWS history, we wrote: "Retaining the talent that was responsible for building AWS into an enormous company will be Selipsky's most important job."

• It's far from clear whether or not this steady stream toward the exits will impact AWS's ability to compete for the next big wave of cloud converts.
• The company has a deeper bench of business and technical leaders who honed their skills during a new phase of the cloud computing revolution — one built around containers and serverless computing — than it might seem from the outside.
• But when good people start to leave a company, those who remain have some thinking to do.

Should AWS falter over the next year, the transitional summer of 2021 will bear the blame.

— Tom Krazit

Update: An AWS spokesperson sent over a statement: "We employ a large number of vice presidents and that number is growing steadily. We have remarkable retention and continuity of leadership at Amazon. The average tenure is 10 years for our vice presidents and much longer for our senior vice presidents. Like with any company, people leave from time to time for personal or professional reasons—many return to the company over the course of their careers. Our business continues to grow, in fact, AWS employs more vice presidents and above today than we did 12 months ago."

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Five Questions For...

Scott Chancellor, chief product and technology officer at Apptio

What was your first tech job?

As a teenager, I worked for IBM. The job consisted almost entirely of replacing old hardware in branches of large banks. It allowed me to see some parts of the country that otherwise I would likely not have seen. I remember making my way out to a U.S. Bank in Pocatello, Idaho in a rented Geo Metro in the middle of a snowstorm (a bad idea if ever one existed) and spending the night replacing IBM PS/2s. I decided shortly thereafter that that was not my calling.

What's your favorite pastime that doesn't involve a screen?

Cycling. You can find me on Zwift every day. [Editor's note: This technically requires a screen.] Triathlons, too, but only very recently.

How can enterprise tech improve its current status around diversity, equity and inclusion?

By increasing funding for programs that address the root problem, especially in the early K-12 education system. Across the board, we need more money and more leaders paying attention to inequity in terms of access to technology and technology education.

What will be the greatest challenge for enterprise tech over the coming decade?

Getting people to interact efficiently and effectively through technology in pursuit of business objectives. A lot of the technology available today that has experienced massive adoption increases during the pandemic feels like the Ford Model T version of what it should be. We're on the verge of unlocking substantial productivity gains by seamlessly integrating these presently mostly discrete (and sometimes disparate) offerings and applying useful, contextually aware (i.e., of internal and external business dynamics, people and processes) capabilities across them.

Will AWS end the decade as the market leader in infrastructure cloud computing?

Only if they fend off Microsoft at the top end of the stack by including more enterprise applications in their portfolio and also build a compelling cloud-agnostic control plane. We are still in the very early innings of the cloud game, and it's anyone's game to win in the long term.

Around the Enterprise

• It's been a rough few weeks for Microsoft Azure when it comes to security: A flaw in a little-known management software layer automatically added to Azure virtual machines was discovered that could have allowed remote attackers to execute code on Azure customer servers. That followed the discovery of an unpatched flaw in Azure's container software last week, which might have opened the door for unauthorized access to data running in Azure Container Instances.
• Wall Street was not happy with Oracle and its latest earnings report, which missed expectations for revenue and projected slightly slower growth for the upcoming quarter than expected.
• JFrog acquired Upswift, which helps companies manage industrial IoT and embedded Linux devices.
• Supply-chain attacks are not going away. TTEC, which helps companies like Bank of America and Verizon provide customer service, was hit by a ransomware attack that disrupted its own services.
• AWS will require proof of vaccination and masks to attend re:Invent 2021, its annual conference in Las Vegas.
• Snowflake launched a new data service for financial companies, expanding on a partnership with BlackRock announced earlier this year.
• Larry Ellison may have Israel on his mind. The Oracle co-founder reportedly offered former Israeli Prime Minister Benjamin Netanyahu a seat on the company's board of directors, but it's not clear if that offer was ever received or welcome.