Earlier quoted context omitted.
Unless demand is fully inelastic, if you up the price fewer people will buy. As such, this should hit the cloud provider profits.
> Unless demand is fully inelastic It's mostly inelastic. People don't buy resources unless they need to do work. Alternatives, such as on-prem hardware, are affected as well. The only work that would be affected would be the work that becomes unprofitable at a 10-30% hardware cost increase and this is probably marginal enough to be ignored.
I work on a system (at Google) with significant hardware cost. Fundamentally, the work my system is doing needs to be done. But the time we spend improving efficiency is hugely elastic. I look at a CPU profile or request flow, have an idea to improve it, look at how much machine resources we're spending, guesstimate how long it will take us to implement and maintain, and use a chart to see if my idea is worth my team's time or not.[1]
If the resources get more expensive or simply impossible to acquire,[2] we'll optimize more.
[1] There are other considerations (will it make the code more complex, thus increasing risk of a security/privacy flaw? what about opportunity cost given that it's hard to hire more engineers and scale a team?) but that's a reasonable mental model.
[2] There's a global RAM and SSD manufacturing crunch already, and if lots of CPUs are replaced due to these vulnerabilities or simply are no longer enough, that's gonna be a big crunch as well. If you're one of the few biggest cloud providers, I think you can't just replace / add tons more hardware than planned without dramatically increasing the price per unit for everyone.