This.

It's sad to say but people are not rewarded by going with a perceived riskier option in an effort to save a couple 100k.

You go with what works and proven, and with what will make your life the easiest. If AWS goes down, then its much easier to explain why. If "Big Bill's Lowcost Cloud Solutions" provider goes down, then your entire judgement will be questioned. Even if Big Bill's Cloud solution is equally or more capable and only half the cost.

Yep, it's risk aversion at the individual level. Your solution you fought for breaks once? That's associated with you, personally. AWS breaks three times in the same time period, or ends up costing a ton more than expected, or whatever? Well it's an "industry standard" so no-one gets the blame, even if it gets bad enough that a change (how about Azure!) is initiated.

Exactly. Try telling your management to switch to DO or Linode, which is already the top spot for 2nd Tier Cloud Hosting. Who is there to take the risk of failing for saving that is in the grand scheme of things negligible.

AWS failed? Great you have half of the internet down as well to cover your ass. No one get the blame and everyone continue with their work.

Of course this depends on culture and regional reputation. For example you would have no problem if your Startup in France is using OVH.

Not sure about DO, but Linode will bounce your servers whenever they feel like it. They usually give notice.

But some were forced to close as they were unable to afford the bills.

B2B SaaS hosting costs are often a low single digit percents.

Considering that software is known to be high margin, there's lots and lots of companies for which hosting can be painful, but not threatening.