The trick will be differentiating within that space. Take hosted search - AWS Elasticsearch for example doesn’t necessarily prevent companies like Bonsai, Elastic, or Searchstax from standing out for the right use cases. Most importantly these companies can provide a lot of high end support and combine with other industry focused products and services (like Elastic XPack) that Amazon doesn’t provide for the niches these companies work within.

We probably need to assume Amazon will host X thing and work to find the niches deeper in X that need to be served.