Outsmarting the Cloud Giants: How to Avoid Getting Crushed by AWS, Azure, and Google

Trying to build something new when cloud giants dominate? It’s a real challenge. As a founder, you spend years on your idea, only to risk being sidelined when big players like AWS or Google release similar products. The key is finding a way to stand out so you don’t become just another middleman. I’ve lived through that fear myself.

Why would someone choose your product when cloud offerings seem sufficient? Even if yours is better, customers see it as another expense and risk. Most just want an efficient solution that fits their budget. This highlights why distinct value is essential—without it, the cloud giants easily take over.

That’s what makes the cloud giants so appealing. Use what you need, turn it off when done. Why choose another product when the cloud has everything at your fingertips?

Look at AutoML. It used to be the hot new thing. Early companies did well, until the cloud giants showed up with their own versions. Suddenly, customers could just drop your product and use what was already in their cloud account. No more extra subscriptions. No more hassle.

Trouble first shows when customers start leaving, and revenues drop. By the time you realize, it might be too late. The giants have moved in, and competitors disappear fast. The experts call it a Red Ocean. I call it a bloodbath.

Here’s a great primer on Red vs. Blue Ocean markets:

How do you avoid getting crushed? Focus on what sets you apart—find your own unique space instead of competing head-to-head with giants. True survival means uncovering needs the giants ignore, not necessarily starting over, but rethinking your position from the ground up.

Start at the Beginning

Big pivots aren’t always needed. They cost time, money, and energy. Instead, step back and gather your team. Be honest about your situation. The goal: break out of the Red Ocean and find your space. Offer what customers truly want—without burning through cash.

Focus on real differentiation. Cirque du Soleil changed the circus by rejecting old rules, cutting costs, and creating something new—no animals, no expensive stars, just a unique show.

The cloud giants play the same game. They give you just what you need, plus a pile of tools to build whatever you want. If they already have something like your product, ask yourself: do you really want to fight them head-on?

Strategic Planning

Start by meeting with your team. Be brutally honest. It’s easy to focus on rivals, but remember to scan for new threats. Sometimes, dangers come from unexpected places.

A simple SWOT analysis can help. Bring real numbers. Leave your ego at the door. The point is to see that with AutoML, everyone fell into the trap: more features, higher costs. People asked about GPUs or ETL. Meanwhile, cloud giants undercut on price and took the market. They undercut everyone on price and swept up. Customers have checklists and RFI/RFQ processes comparing your product to cloud options. Since cloud is an expense, your product—as a capital expense—is at a disadvantage. Hiring staff to build a “me too” cloud product is often the cheaper choice and a more attractive option from a budget perspective.

Your key question: Is your product just another commodity, or does it deliver unique value the cloud giants can’t match?

Value Innovation: Redefine Your Product

If your AutoML tool is just like everyone else’s, with a few bells and whistles, that’s not real differentiation. What if you took the core tech and used it for something totally different? Maybe it powers a lead generation app. Maybe something else. The point is to think bigger.

The following table shows what a Red vs. Blue Ocean strategy looks like. In a Red Ocean market, differentiation and costs are traded off—more features mean higher costs. In a Blue Ocean, costs are low. If Amazon, Azure, and Google have competing AutoML products, why compete there? Strip out your AutoML engine and create a solution that the cloud lacks. Then, integrate it to make deployment easier. Old infrastructure to make it easy to use. The Red vs. Blue Ocean analogy highlights differentiation and costs, but not execution.

Plan Your Go-To-Market (GTM) Strategy

The Red and Blue Ocean analogy highlights differentiation and costs, but not execution. Your GTM strategy is crucial to confirming whether your Blue Ocean strategy is working. As I’ve written in “10 Laws for Starting a Successful Startup,” your revenues should start increasing if the strategy and GTM are successful.

One effective GTM method is to offer a “T-shirt sizing” subscription model. For example, with your lead-generation application powered by AutoML, sales leaders could sign up for different subscription tiers (e.g., small, medium, or enterprise).

While AutoML-to-lead generation might not be the best idea, if your internal costs are low enough, you can outcompete even the small players.

Execution and Success

A friend runs an engineering startup. He grabbed 20% of the US solar engineering market by automating processes. His secret? Fast turnaround. He found his Blue Ocean in a crowded field and has been winning for years. In a crowded space, he’s been winning for years.

For this entrepreneur, speed made all the difference. Automation provided a competitive advantage, and as a result, competitors became less relevant.

End Notes

No founder likes losing ground to giants. But you can win by planning carefully, identifying what makes you different, and keeping costs down. Before you pivot, ensure that what you offer is truly unique and answers customer needs.