That's not what "proprietary" actually means? It means the opposite of "free/open" in the sense of software. The implication (true or not) is that however you're doing the behind the scenes magic, you intend to keep that part a secret and/or behind intellectual property rights, such that I am not allowed to hack at it if I wish.

It is a possible way to "value-add" -- aka be the thing that people can't have unless they pay for it, that strategy is your choice and it's not a crazy or awful one per se. But I will not only always stay away from it, I'll always tell other people to as well.

So far as I have seen, it ALWAYS ends one of two ways: It ends up being open anyway or the company screws people over, eventually. I'm fine waiting for the former and not risking the latter.