> Smaller providers have a much stronger incentive to be reliable, as they will lose customers if they are not.

I disagree because conversely, outages for larger providers cause millions or maybe even billions of dollars in losses for its customers. They might be more "stuck" in their current providers' proprietary schemes, but these kinds of losses will cause them to move away, or at least diversify cloud providers. In turn, this will cause income losses to the cloud provider.