Something I don't understand is: how is other companies making money an existential threat for Element? It seems rather that Element's hopes of making enough money (to fund development) by selling hosted/managed services was misplaced.
Competitors can just take the open source parts of the matrix projects without contributing code or funding back.
As result, in a bid between Element and competitors, Element will lose because Element actually pays for maintaining these open source projects.
And where criteria like “trust and confidence” are too often cover for corruption and favoritism.
So I don’t see how someone acting in a different market had any bearing on their business at all. Unless they were indeed in that market, but that doesn’t seem clear to me at all from their messaging.