Ultimately cloud providers don't want revenue, they want profit. Except in some perverse cases (like cost-plus-percentage contracts), it's not generally in a business's interests for their costs to go up.

Even if there's no opportunity to switch away, eventually you bleed your customers dry and put them out of business. You will typically always aim to price your offering at the equilibrium point where loss of custom increases faster than the increase in profit, and vice versa.

One situation in which an increase in your costs can be good, is if the same increase applies more to your competition. But, in this case multi-tenant cloud is hit harder than the competing alternative of private infrastructure.

This is an important point that I noticed around the time of Spectre/Meltdown as well. The mitigation for those bugs caused an average of 30% CPU slowdown, meaning it took 30% more CPU cycles to perform the same work as it did prior to the mitigation. If a cloud provider rolls that out to every server, then every customer's bill for CPU usage should increase by roughly 30%.

Am I totally misunderstanding this? Someone please correct me if I'm wrong.