I am surprised the CEO does not understand the dynamic of his business. An open source project replicating your product is always a boost to the business. There is no case where that's not the case. The OSS is essentially the minatenance free free tier of the paid product.
I went to a YC event where the founder of a multi-billion dollar open source SaaS said pretty much the opposite and tried to drill home how strategic the choice needs to be for the company to survive.
This must be Gitlab?
Nah, their moat is making the software as fiddly and ops heavy as possible. I really like gitlab but having set it up myself several times now, it's kinda a mess and they're not incentivized to make it decent.