Here's the thing though, they actually don't have to fend off rivals. Amazon's cloud business is based on excess capacity that they have as one of the internet'

Here's the thing though, they actually don't have to fend off rivals. Amazon's cloud business is based on excess capacity that they have as one of the internet's biggest chokepoint in traffic (post-Thanksgiving holiday spending). When I took managerial accounting classes, we looked at situations where it would seem on paper that producing a certain good would lose money, but when you compared total profitability in letting excess capacity sit idle and distributing fixed costs like rent and overhead, you can actually sell a good for a loss. Amazon doesn't have to make more money than they spend on cloud computing, they only have to make more money than what they would have had to spend on cloud computing without competing on the market.