It’s been a good year for Amazon CEO Jeff Bezos. In November, Fortune Magazine named him its Business Person of the Year for 2012 and now Harvard Business Review taps him the second-best CEO in the universe in an update to its original rankings posted in 2010. Because of HBR’s methodology, Apple CEO Tim Cook was not eligible and his predecessor Steve Jobs, who passed away last year, was ranked as the top-performing CEO over the past 17 years.
If you’re an Amazon devotee you have to hope this honor isn’t the equivalent of the Sports Illustrated cover jinx because as successful as Amazon is — in online retail, in publishing, and in cloud infrastructure services — it faces very big challenges.
For one thing, the sales tax advantage Amazon’s retail business has enjoyed for 16 years is evaporating as more states are forcing it to charge sales taxes on in-state purchases. That could erase some of its traditional advantages over brick-and-mortar stores.
And, Amazon Web Services, the company’s giant IT infrastructure business, faces growing competition as well from players like Rackspace, IBM, VMware, Joyent, SoftLayer and others. In addition, at a time when AWS is trying to lure more enterprise workloads, it’s seen its share of embarrassing snafus including an issue at its US-East data center on Christmas Eve which brought down Netflix streaming video. Netflix is both a big Amazon customer and a rival to Amazon Prime Instant Video service.
Perhaps most worrisome for Amazon is that Google, the one company that many people say can challenge AWS on pure scale, appears to be serious about competing in the Infrastructure-as-a-Service (IaaS) fray.
But back to the list: Bezos rose to the No. 2 spot on HBR’s roster this year, from No. 7 in 2010. According to the authors:
“Under his leadership, the company delivered industry-adjusted shareholder returns of 12,266% and saw its value increase by $111 billion. In recent years the online retailer has expanded aggressively into new segments such as cloud-based computing services, while working to get the most out of the markets it already occupies. Its revenue growth shows no signs of slowing: Sales increased by 40% in 2011.”
The authors acknowledge that Bezos, who prioritizes consumers over shareholders, “vexes” Wall Street at times. (No kidding, take a look at all the “dump Amazon” posts on Seeking Alpha), but that Amazon, the online-retail-giant-now-IT-services-provider, has done well by long-term investors. And, long-term thinking is something Bezos talks up a lot, including last month at the AWS: Reinvent event in Las Vegas, and is also a focus of the HBR Top CEO list.