You're mistaken if you think Microsoft doesn't compete directly with its partners.
If anything, they are very sneaky how they do it, every ISV knows and yet still collaborates with them.
SharePoint improvements have been built and incorporated out of the box because/thanks to ISV's, Flow (now PowerAutomate) is a direct inspiration and competition from one of MS historical partners in the SharePoint space called Nintex.
They absolutely compete, they absolutely steal ideas and they do so by getting their partners to willingly show them what they are working on.
For any ISV worth their salt in the MS world, they know this and hopefully they have a plan for when that ultimately happens.
The one thing that Microsoft keeps focusing on is IT related stuff, whether it's software or hardware, it's still in the IT realm 90% of the time.
On the other hand as you pointed out yourself, Amazon does everything and doesn't think twice to enter a new market if it thinks it can aggressively compete and gain a significant market share.
Similarly, both Amazon and Google do not have an engrained culture of working with partners the same way that Microsoft does, they do work with some don't get me wrong, but it's nowhere near what Microsoft does and how it behaves.
It's no surprise that the Co-Sell program at Microsoft is so successful, it's pushed by the Higher ups and all the way down to the field sales people live and breathe it.
Google is trying to do something similar but you can tell (if you work or have worked with both sides) that the google side doesn't care as much as Microsoft.