So predatory pricing is very illegal, and considering that there are three major players in this space (azure/gcp/aws), all three of them would have to coordinate to kill other competition (since otherwise one of them could break from the deal and make their own money by betraying the other two), which is also very illegal.
And why would they even need to do something like that? AWS is wildly profitable anyway with enormous amounts of market share. When would it ever make sense for them to give up billions and billions and billions of dollars in profits to wipe out tiny cloud providers while also screwing up the economics of the space (changing people's expectations of how cloud should be priced meaning they won't accept prices as high as they are currently) and hoping and praying that GCP and Azure play along when it's time to hike prices back up?
What about the case of Amazon vs Diapers.com? Amazon basically undersold this company on diapers to the point where diapers.com was told to sell to Amazon or fuck off and die. The company ended up selling out for $540M USD.
This behavior is illegal yet Amazon is still here. While there’s no obvious case for their cloud division, it’s not unprecedented within the company to do so.
Good point. As a counter, this article (It's a national review article, so take it with a large grain of salt - I don't agree with it entirely but you and I have likely read the same articles on the other side of this and the NR article provides a good alternate perspective) suggests that the Quidsi case is not really predatory pricing (as the FTC determined in their investigation) as this did not drive amazon to achieve a monopoly in diaper sales (most diapers are still bought in grocery stores etc), even in the online space did not have a long term effect (The founders of Quidsi did quite well for themselves in their next venture, Jet.com). The allegations of undercutting to kill quidsi also came primarily from the founders and hasn't really been backed up. In the long term, that didn't really impact the consumer at all, even if amazon did kill Quidsi, they weren't able to shape the market.
Sorry for the miscommunication then, since if it seems like I was implying that, I clearly wasn't explicit enough in stating that this sort of tactic would not work because it absolutely requires communication in order to coordinate. The game theory does not support the idea that coordination could happen without communication. AWS, Azure, and GCP are all competitors who are incentivized to make moves that hurt the others at their benefit. Coordinating would be moving away from the nash equilibrium, and that behavior would not be able to be sustained without a defined punishment as a part of a collusive relationship, and they would need to communicate to set that up.
And why would they even need to do something like that? AWS is wildly profitable anyway with enormous amounts of market share. When would it ever make sense for them to give up billions and billions and billions of dollars in profits to wipe out tiny cloud providers while also screwing up the economics of the space (changing people's expectations of how cloud should be priced meaning they won't accept prices as high as they are currently) and hoping and praying that GCP and Azure play along when it's time to hike prices back up?