All AWS, Azure, and Google would have to do to respond is offer cut-rate VMware hosting.
There isn't a ton of moat in selling the lowest common denominator. I don't know that IBM has much lead on the other side either, from Rackspace, for example.
I'm not sure if that would be an actual answer so an nth-wave of on-prem workloads.
It's not about owning a platform to run VMs, it's about owning the software stack to enable you to run and manage, bare-metal, VMs, containers, and high-level services on your customers own hardware I their own DC or colo'd.
There isn't a ton of moat in selling the lowest common denominator. I don't know that IBM has much lead on the other side either, from Rackspace, for example.