Amazon stressed the importance of its cloud business in dramatic fashion today, elevating the leader of Amazon Web Services (AWS) to run the entire company.

AWS CEO Andy Jassy will replace Amazon CEO Jeff Bezos this summer, the company announced today. Amazon hasn’t yet named who will lead AWS when Jassy, who joined the company in 1997 and founded AWS in 2003, assumes his new role.

AWS’ net sales swelled 28% year-over-year to $12.74 billion during the fourth quarter of 2020. That level of growth, while healthy by almost any measure, marks a continuation of incremental declines in growth on a percentage basis. AWS’ revenue grew 29% in the third quarter of 2020. 

That stalling growth was also reflected in AWS’ operating income, which jumped 37% year over year to $3.56 billion. AWS’ operating income increased 56% year over year in the previous quarter. 

“[AWS is] continuing to grow at a meaningfully larger absolute dollar rate than others out there,” Dave Fildes, Amazon’s director of investor relations, said on the earnings call.

“We’re improving infrastructure planning to meet the capacity needs given the growth we’re seeing. More broadly, our results reflect that balance between the investing, the price reductions, driving cost efficiencies. The margins are going to fluctuate quarter to quarter depending on those factors,” Fildes said.

AWS also extended the useful life of servers in its data centers in early 2020 from three years to four years and that decision fueled some benefits in AWS margins, but those margins will diminish throughout 2021, he said. 

The company’s cloud business generated 10% of Amazon’s total revenue during the quarter, and it continues to wrestle with a growing backlog of deals. AWS ended 2020 with about $50 billion in backlogged or otherwise unfulfilled deals, and that’s up 68% year over year, Fildes said.

“We continue to see companies meaningfully growing their plans to move to AWS. In Q4, AWS saw a continuation of strong usage and revenue growth. AWS added more revenue quarter over quarter and year over year than any quarter in its history, and is now a $51 billion annualized run rate business supporting millions of active AWS customers,” CFO Brian Olsavsky said.

Amazon took a $4 billion hit on COVID-19 related costs during the quarter and said total pandemic-related costs reached $11.5 billion in 2020. Olsavsky said there are still outstanding concerns and questions about the continuation of conditions exacerbated by the global pandemic, which has claimed 2,251,345 lives globally, including 446,689 deaths in the U.S.

AWS remains the market leader, maintaining a 32% share of the global market in Q4, according to Synergy Research Group. Microsoft Azure’s revenue grew 50% year over year during Q4, and it ended the year with a 20% market share. Finally, Google, which disclosed operating income for its cloud business for the first time, said its revenue grew 47% year over year, and it ended the year with a 9% share of the global market, according to Synergy’s analysis.

Amazon banked $7.2 billion in net income on $125.55 billion in revenue during the quarter. Total revenue was up 40% year over year and profits were up 121% during the same period. Amazon’s workforce surged 63% in 2020 and it ended the year with 1.29 million employees.