"In a time of practically costless operating systems Microsoft must breach privacy on a 'service as a software substitute' basis because now the customer is the product"

Software as a service substitute is only one means of exploiting the users and actually a rather specific one. Facebook, for instance, is massively making money without being service as a substitute; the term is only referring to jobs that you could theoretically do on your own computer, but instead let a server do for you, for conveniance's sake.
It always causes a lot of confusion and misunderstanding.

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