Why Amazon and Google entered cloud computing market?

As we know Amazon and Google are leading cloud computing service providers.  These enterprises harness cloud computing to build their own services such as Gmail, Google Search and buying books online. In order to keep customers happy and avoid any waiting on web, they generally build their computing infrastructure to support the peak demand of their business. (You may know PHS- Peak hour service buses in metros such as Bangalore). However, the average demand of the system is several times smaller than the peak demand, their computing infrastructure is usually under-utilized and the cost of its operations constitutes an additional expenses. In order to offset this extra expense, they have offered utilizing this surplus computing power as a service when it is not used by their business systems. Their offerings come at very attractive prices since they have deployed their systems at a large scale, and thus accrue benefits from the economy of scale. 

In addition to this, advances in virtualization technology in the last few years have brought in new novel system techniques that give the cloud-provider the ability to transparently satisfy its cloud-users request without impacting its own utilization of the system. 

The offering from Google such as GAE is based on these ideas, and so is AWS from Amazon