"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.