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The behemoth will take the market anyway it can. It has lost its control of it. Now it has to use any way possible to stay relevant. But fortunately this is a losing game.

With the tooling we have now, it makes no difference where the workload runs. As long as you avoid APIs that are not common (and you easily can), you can pretty much deploy your applications unchanged on AWS, GCE, Azure, Rackspace or your own metal, leaving them to compete on price.

For Microsoft, it's a losing game.

The only segment I imagine they can have a competitive offering is with Windows servers and Windows-based infrastructure (such as hosting your Exchange or Dynamics).

You have no idea. Unless Windows start shipping with a Linux kernel, Linux containers will always be slower on Windows.