There is no possible way to compete against someone else who doesn't need to fund the development of the software but can still take in all the revenues and profits from deploying it as a service.
Open source companies with SaaS offerings need to have plans to differentiate themselves on hosting quality, not features. Yes, you can do better at hosting your own product than Amazon in many cases with customized, closed-source optimizations (that are unrelated to feature parity and does not intentionally limit the open-source/self-hosted form), support, etc.
That is true in a literal sense but (anecdotally) from the point of view of an engineer deploying ie; Redis, there is no real space for that angle of competition when the choice is between having to go through procurement hurdles to sign a contract with Redis Labs versus say; spinning up Redis on AWS which has zero hurdles because there is already an organization wide agreement in place for example.
The competition there isn't a level playing field as the deck is kind of stacked for most businesses where engineers don't have free reign to procurement what might be objectively the best hosting solution?
I've never really thought through this in any depth before now so don't consider this a great fleshed out argument, just an observation from my personal experience.
And that's not an appeal to authority: there just so genuinely and obviously is no such guarantee in enterprise that quality will ensure success that explaining it feels like trying to break down an elementary element.
"Impossible to compete" is hyperbolic (you can almost always compete), but from a business fundamentals perspective it is not a level playing field and odds of success in that arena are very very low. And as my sibling comment points out, this is massively compounded by the fact that (by their very nature), hyperscalers are also hosting other infra for you, whereas Redis Cloud is only going to be offering hosted Redis. So even if the DX/UX is much better for Redis Cloud, it is still an uphill battle to convince corpos and even SMEs to split up their hosting like that.
They will pay Microsoft and Amazon, not you, the author of the software to use your software.
If the companies had made a bad call in structuring their business and owned up to it I think we'd be having a very different conversation than we are. We're here because they failed to own up to it and instead tried to get people to raise pitchforks against AWS. Never mind that their intended model was the obviously doomed model of reselling AWS's hosting with a commission on top, and never mind that it was the trade-off they chose when they chose to release their software as FOSS and get the boost in adoption that comes with.
I do fully agree with antirez above that we need a new plan for funding FOSS. But I think that's a poor justification for the rug pulling and vilifying that the existing companies did.