Monday, December 23, 2024

The former Amazon intern now running its profit engine

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“I knew immediately: that was the one I wanted to work on,” Garman wrote in a company blog post recounting this story this month.

The division was Amazon Web Services. The person giving the presentation was Amazon.com’s current chief executive, Andy Jassy, who was running the unit at the time.

This past Monday, Garman had his first day as CEO of the unit, now a $100 billion business and the engine of Amazon profits.

Back then it was a still-nascent idea that companies could move their data-hosting and -processing needs away from their own servers into AWS data centers. Rather than owning the equipment, companies could rent space on large racks of servers and quickly increase and decrease their capacities based on demand.

While most major companies depend on the cloud today, in the beginning, it was part of Garman’s job, as one of the first product managers at AWS, to explain what it was and why customers needed it. Some didn’t get why a bookseller was in this business. One bank said it would never trust an outside company with its data.

“They basically told us there’s no chance that any big bank would ever put a production workload and run it outside of their own facility,” Garman said in a 2021 interview at an industry conference.

Garman frequently worked directly with customers to customize cloud-service products, former AWS executives say. He liked to dig into projects and his memory and attention to detail stood out.

One former colleague recalled Garman questioning him about something he had promised months earlier in a “six-pager,” the Amazon document where employees lay out a proposal in a memo. When the employee disagreed, Garman left the room and got a copy of the document to prove he was correct.

Garman declined to comment.

The Seattle company is in the unusual position of needing to play catch-up in artificial intelligence. Its local rival Microsoft is leading thanks to its $13 billion investment in ChatGPT maker OpenAI. Alphabet’s Google brings to the competition a pedigree of AI talent unrivaled in Silicon Valley. Garman’s predecessor, Adam Selipsky, left after three years on the job.

Born and raised in Scottsdale, Ariz., Garman, 48 years old, got his undergraduate and graduate degrees in industrial engineering at Stanford University.

A longtime music fan, he listens to Taylor Swift while driving his children to school and has an eclectic taste in music that ranges from Dave Matthews Band to Macklemore to Metallica. One of his first jobs was for a music startup. Riffage.com, an early digital-music website that popped up during the dot-com boom.

More likely to be found in jeans and a checked shirt than a suit, Garman is at home grabbing a beer with co-workers and clients and talking tech. He has spent years building, explaining and creating products for the cloud.

“We often spend as much time at least talking about technology as we do about running the business,” said Don MacAskill, CEO of digital-photography business SmugMug, one of AWS’s first customers.

A few years back, MacAskill asked Garman to create new servers for his company with chips using Arm architecture, a different approach for chip design. It was an arcane topic.

Garman replied by peppering the CEO with questions. What would the company do about its software stack? Might it require a recompile? Did features like hyper-threading matter? And what gigahertz performance was he targeting?

“This wasn’t a ‘let me get ahold of my team’ conversation. It was just the two of us, and it was deeply technical,” MacAskill said, in an email.

In 2013, Garman was promoted to be vice president of compute services, helping power AWS’s expansion from a $3 billion business to a $35 billion business.

Seven years later, Amazon founder Jeff Bezos stepped down as CEO and picked Jassy as his successor.

Many employees and customers already saw Garman as AWS’s likely next leader, given his close relationship with Jassy. Instead, the company brought back Selipsky, who had left AWS a few years earlier to serve as CEO of Tableau Software.

Several former AWS executives said that Garman, who had spent his career developing products, needed experience overseeing the company’s sprawling sales team before he was ready for the top spot.

Garman took over as the senior vice president of sales, marketing and global services. That gave him oversight of the company’s sales organization numbering in the tens of thousands. It was also a booming time for the company during the pandemic.

While AWS has unveiled many AI investments and products, AWS executives and customers say that for it to get ahead, it needs to tap its technical know-how to attract businesses to its AI offerings.

“We’re in the stage where everybody wants to do AI but they don’t all know what to do with it,” said Mike Clayville, a former AWS executive and colleague of Garman’s. “It’s so early, and it’s not obvious what solutions are going to be super meaningful to customers right now.”

As the impact of Covid-19 receded, expansion at cloud companies started to slow. AWS revenue growth slowed to less than 15% last year after averaging more than 35% for the prior seven years.

Like Amazon’s retail side, AWS wants to be the everything store and offer customers as many AI models as possible. In spring 2023, it launched Bedrock, its platform for customers to use models from companies like Facebook and startups like Cohere and Anthropic.

“It’s our job to help customers easily build any type of generative AI applications and make sure they perform well, do so securely, responsibly, and in the most sustainable way possible,” Garman said in a blog post.

Write to Tom Dotan at tom.dotan@wsj.com

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