I believe open source does still make business sense, as evidenced by the substantial investment that the corporate world has made in open source.
At first glance, it may seem that a company’s best interest is to keep as much secret as possible (source code, discussion, documentation, schemas, etc) to maintain an advantage and keep secrets away from competitors. But Eric Raymond lists a number of ways open source can be profitable that are somewhere in between locking everything away and sharing everything, each with different use cases. Companies can stay competitive with strategies such as growing the development ecosystem around the product, offering consulting/support services, or open-sourcing only down the road.
Of course, there are a number of situations where open source does not make sense from a business standpoint, as Raymond himself identifies. And it is not a silver bullet, either: there are plenty of projects and situations that should lend themselves to successful open sourcing in theory, but in practice they fall short due to a variety of factors such as bad luck, bad leadership, or bad timing. Just like start-ups, we often hear mostly about the successful projects rather than the unsuccessful or moderately successful ones, giving the false impression of an extraordinarily high success rate. However, the similarities between open source and start-ups end there, as I believe OSS is worth the try in many situations and for many people, while start-ups are more risky and not for everyone.
The open source movement seems strong currently, but there are steps that can be taken to ensure it stays that way and can weather an ever-changing technology landscape. Many corporations (particularly large ones) invest significant amounts of money into OSS. They freely release (and continue to maintain and grow) software that they developed and used internally, they pay developers to work on other projects, and they invest in open-source infrastructure. For example, Microsoft acquired GitHub in 2018, and they quickly began to use their resources to develop new features and make previously subscription-only perks (like private repositories) free for all.
Despite the many benefits that corporate involvement in the open-source movement provides, in order to remain truly “open” it is important to not become fully dependent on it. There is the risk of companies using their weight to influence standards and control competition. For example, Google has come under fire in recent years for using the large market share of their Chrome browser to dictate web standards, similar how Internet Explorer did in the early 2000s (although not as bad as IE6). Corporations are not always friendly to the open source community, either: they have a tendency to take open software and (thanks to permissive licensing) package and sell it for a profit, such as AWS offering Elasticsearch directly to customers (which as recently led to a dispute over license changing).
To me, the Magic Cauldron seems highly effective and powerful in many situations, although I admit it still also seems magical to me. Although not software, Wikipedia is a high-profile example of an open-source product that is highly successful. I use the site frequently, and I am always amazed that it is so thorough, up-to-date, and reliable (mostly), when it could have easily become incomplete, stale, and full of made-up information or trivia. Somehow there is a dedicated community of people, almost all of whom are volunteers, who maintain and write millions of articles because they want to contribute to a valuable collection of human knowledge.