I say do it for both personal benefit and potential strategic benefit ... afterall, alot of software IS a service
Most open-source projects stand to provide a return in the right circumstances. Don't forget, unless you have a patent or some massive advance that is so complex and unfathomable that nobody can re-implement it .. if they want to they will anyway, so you have little protection staying closed source anyway ... even more interesting is that the open-source equivalent may well overtake your proprietary one if it garners support.
People may send you great ideas you never thought of, or take your codebase in a direction you would not have predicted. Unless you have significant value in terms of IP or strategic position tied up in the source code ... releasing it will probably do more good than harm.
Also, by being first to the open-source arena with your code, you gain control over any resulting community driven development ... if somone reimplemented your functionality and went open source ... could you compete on any front?
I know it is a cliche, but probably for good reason, but read The Cathedral and the Bazaar and the essay Open Source as a Signalling Device - An Economic Analysis which is an interesting read. Michael E. Porter's texts on competition analysis are interesting when held up against the mixed value economics and competitive forces of open source and shows how disruptive open-sourcing a product can be to competitors ... and how it can add value to your market position. Also, whilst counterintuative, it can raise the barriers to a successful entry by competitors.
More food for thought on the advantages and disadvantages of open sourcing:
- What the DoD thinks of open source
- Alfred H. Essa "Innovation and strategic advantage: lessons from open source" (warning, journal link)