You're not going to be in the $1B space selling services, but neither are you at risk of extinction.
Juggling those becomes very difficult.
I've been following this space for years, and there are no easy answers.
I think the model where the 'secret sauce' is proprietary, and you give away the infrastructure, like, say, Ruby on Rails, seems to work ok. Produces some good open source software and is still an 'easy'/straightforward business model, because you're selling a product.
The two are not incompatible. Most of our new features are paid for by our clients, some of which we then include into our main product. Maintenance comes from other sources of revenue, though - hosting, for example, since many companies would rather not deal with that, even if they could.
Well, IBM and Oracle sell services on Open Source products and even Microsoft does nowadays...
And they could sell services for my open source product too, if they fancied it.
So how that makes me much safe?
There are lots and lots of companies in the government and huge enterprise services space that have more than a billion in revenue.
A few off the top of my head:
* https://newsroom.accenture.com/fact-sheet/
That said, it's not like you can't make money selling services.