Yeah, so they’re not really competing with Elastic right? If I already have an AWS environment I’m never going to use an Elastic hosted service, since it’d be outside my VPC.

I really don’t understand how that business model works.

If you have an AWS env, and they have no comparable alternative, you may be forced to look outside AWS, eg: to Elatic's SaaS offering. But in many cases, if AWS has a comparable offering, you simply don't bother looking outside.

It's similar to bundling tactic of Microsoft, and other big vendors. By bundling MS Teams with other things, no one has to "buy" Teams, they already get it for "free" (well, it's no extra cost beyond what they would be paying for Office or whatever already), so why "buy" Slack when you have a similar chat tool for "free".

But what if the customer needs ElasticSearch, see that AWS provides it and don't look further?

If AWS didn't take the work of Elastic those customers might have used Elastic's services instead.

How can AWS offering the same thing not be competing against Elastic's offering?