GA is free. Hosting an open source alternative would need time, effort (to understand the new environment) and money. There is a reason people outsource tasks that are not core to their skillset. Cause, the expenditure will be significant and result will not be half as good. Same reason we do not host mail servers though much easier self hosting options are now popping up and wonderfully maintained. A good business will always find ways to trim the fat and play to their strengths.
But much much more importantly, GA has billions of pages of free documentation (aka blogposts) for every task a business needs. If you are stuck with a problem, there is a huge community of people to reach out to and the answer is somewhere out there (Or you just learn to live with it, just as everyone else. You are not conceding any advantage to the business competitor). On the other hand, the open source alternatives have not yet benefited from the adoption of such a massive community, yet. It is very important to have some early adopters, who can show exactly how the end user can replicate the workflow they have setup in GA in the open source software.
* Then, for existing businesses, there is also the problem of sunken cost and huge amounts of existing data in GA that they cannot abandon.
* Then there is the thought process that exists in online communities on the value of accumulating data and how it can add value to their business. So, we will need to break them out of the FOMO on GA.
The first two doesn't really compete with GA, and does not offer some features many requires from GA ( such as returning visitors ). The last one has its own issues.
In what way? Are you saying server logs aren't just as good for basic analysis or business dont use analytics?
Don‘t get me wrong: The open source alternatives are great and there are valid privacy concerns with sending all your customer‘s data to Google. But for moderately interesting analytical requirements there‘s just no comparison.
* Habit: GA is so ingrained into the web development / marketing so it's the safe / default choice that not many will question
* Data: GA collects everything imaginable people don't need but it's still data that may sometimes be used so it's a safer choice to collect it than not to
* Awareness: many people are not aware of alternatives
* Convenience: most people don't want to self-host while most open source alternatives are focused on self-hosting
* Price: GA is free while hosted open source alternatives are not
