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Amazon Web Services CEO Andy Jassy addresses the crowd at AWS re:Invent 2017. (GeekWire Photo / Tom Krazit)

As the financial strength of Amazon Web Services has started to become clear over the last several years, a lot of people (including yours truly) have wondered if AWS would be better off operating as a separate company. CEO Andy Jassy, who has been there from the beginning, doesn’t seem to think that’s in the cards.

“I’ve been at Amazon for 20 years, and I’ve learned to never say never. But I’d be very surprised, because there isn’t a need to do so,” Jassy said in response to a question about the potential for a spin-off during a press conference following his keynote address at AWS re:Invent Wednesday.

There are a lot of reasons why spinning off AWS would be quite difficult. For one thing, Amazon’s profits would surely look different without the strong operating profits generated by its cloud division. And Jassy pointed out Wednesday that those profits would look different as a separate company, because AWS would have to incur more overhead to operate independently.

Amazon’s success has also allowed AWS to spend a ton of money on building out the market-leading public cloud infrastructure service, which requires billions of dollars to create and maintain. Companies tend to spin off divisions that need a liquidity event to finance their future, Jassy said, and capital hasn’t been an issue for AWS.

But the two organizations are in very different businesses, and several people I’ve talked to at re:Invent this week have noted a distinct cooling in the relationship between AWS and its retail industry customers, as has cropped up a few times earlier this year. The acquisition of Whole Foods this summer appears to have been the breaking point for a lot of these customers, who are otherwise satisfied with AWS as a partner but have decided they can no longer fund the expansion of its parent company, which would love to take a large chunk of their businesses.

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