Why cloud providers give startups credits

This is a tactic that the big cloud providers do all the time.

AWS, GCP, Azure… they keep very generous credits to startups. Why is that?

1. vendor lock in: when you’re a small startup, by the time you’ve spent the 25k or 50k, most likely you’re using a bunch of their products and it’s hard to move
2. future bets: 25k in credits doesn’t mean 25k spent. Their margins should be quite high. Another benefit is that in the long run this is the cheapest way to acquire enterprise companies. Just be generous to startups, help them grow, and as they grow, so will their cloud expenses

If you have a successful business among small/mid customers, it might be easier / cheaper to play the long game and grow with your customers instead of trying to acquire enterprise where sales is much more expensive.

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