They're giving people what is essentially a loan, which they are uniquely able to give, to help them start a business, in the hopes that this will be an even bigger business. This is almost the definition of a win-win.
Customers are free to leave at any time or work with other providers, but they choose AWS because they give them more value.
>This is almost the definition of a win-win.
Not long-term for the company that gets lured into this trap. Just like with Cisco/Oracle, companies will waste millions of dollars once they are cornered into a situation like this because the switching costs are so high even though there are plenty of other alternatives.
By pricing it in to the discounts in the first place. So smaller discounts. And by making sure their offerings are priced competitively to comparable products.