I run a subscription personal wiki service (http://luminotes.com), and I open sourced the software that runs it from the start.. Mostly because I was sick of working on proprietary software for a living. And then two interesting things happened. First, people started signing up for paid subscriptions. And second, no one made a competing service from my source code (yet).
I think in general people overestimate the value of their source code. There are so many other things that you can bring to a business that any copy-cats wouldn't necessarily have (e.g. your knowledge of the source code, your vision for the product, etc). So don't flatter yourself into thinking that as soon as you release the source, a dozen competitors will spring up using your software. And even if they do, you'll still likely out-compete them.
So like making any business decision, weigh the advantages and disadvantages of open sourcing and make a decision based on those. But don't make the common mistake of overestimating the disadvantages.
I guess my biggest concern involves cases like mysql. I recently read estimated 1/1000 users pay. Their primary revenue is support. If my primary revenue is service and I give the software away, then everyone can provide the service.
I think it's okay not to opensource, since you're not distributing software but offering a service.
Free software is about sharing and a sense of community.
Running a piece of software on your machine, you should be free to inspect and modify the source, sharing your modifications back. These freedoms don't seem to apply in such a strict sense to web services.
I think in general people overestimate the value of their source code. There are so many other things that you can bring to a business that any copy-cats wouldn't necessarily have (e.g. your knowledge of the source code, your vision for the product, etc). So don't flatter yourself into thinking that as soon as you release the source, a dozen competitors will spring up using your software. And even if they do, you'll still likely out-compete them.
So like making any business decision, weigh the advantages and disadvantages of open sourcing and make a decision based on those. But don't make the common mistake of overestimating the disadvantages.