I think there are a lot of opportunities to compete with AWS on a product-by-product basis, but the easy thing to miss is how important the total ecosystem is.
Amazon has built an amazing (owned) ecosystem that gives them a lot of advantages and allows them to a) offer a less-good product on an individual basis and b) charge more money overall for a set of products.
If your product competes with a single AWS product AND you are competing with Amazon for your customers (you haven’t found some niche outside AWS’ market) then your acquisition costs are going to skyrocket.
It seems obvious but from what I can see, most vendors are not accounting for this at all in their product roadmap or their gtm.
Many seem to decide to go upstream and focus on Enterprise. It buys you time, but that opportunity is only going to be Amazon-free for a little while longer.