Watching doesn't sit on your computer screen, watching starts when you leave the house... as Bod says, mobile phone... but then you're caught on average 70 times a day on CCTV, every time you use chip & pin, every discount/loyalty card you use... all watched. And occasionally, just occasionally you have a nosey neighbour who watches you, records you on their own personal CCTV and could probably tell you every item you put on the washing line last Tuesday.
Software is the least of our worries, and Microsoft are playing catch up right now... they're moving away from the software/hardware hidden monsters because now we have clouds... you have to access a cloud to get certain software, and that is what they are watching... they need the data to work out where to go next. Apple have been doing it for years... Microsoft, just like the browser wars, have just realised and are desperately trying to keep up. They're busy... too busy to watch you looking at knives, hammocks and the odd reference to wolves