Stutz: Useful software written above the level of the single device

Trying to wrap my brain around business models and APIs of the big guys. Generally our strategy is to ignore them and focus on our customers needs. Innovate from there. But I came across this quote worth pondering:

"Useful software written above the level of the single device will command high margins for a long time to come." – David Stutz

and this one as well, both written in a context of Microsoft

"Digging in against open source commoditization won’t work – it would be
like digging in against the Internet, which Microsoft tried for a while
before getting wise. Any move towards cutting off alternatives by limiting
interoperability or integration options would be fraught with danger,
since it would enrage customers, accelerate the divergence of the open
source platform, and have other undesirable results." – David Stutz

From 2003 no less. And now Microsoft is committed to live technologies. Or what O’Reilly calls Web 2.0.