I have known Williamson's work for over 4 decades. One of his early pieces, on economies of scale as an anti-trust defence, became a classic in the industrial organization literature. It has formed an important portion of the rule of reason in merger cases and is explicitly behind most merger defences in Canada. Back in the 1970s I was inspired to do a minor piece in an obscure journal that extended his work to mergers and trade policy in small, open economies.
That was after I had already taken a job teaching economics here at UWO. Earlier, I became aware of Williamson's work on managerial discretion in large corporations (based on his dissertation). It was insightful, and it played a role in so much of the work that I published early in my career on the effects of the separation of ownership from control in large corporations.
But another important thread of work by Williamson seems to have been neglected by so many current commentators. This relates to comparisons of gubmnt intervention by direct regulation vs. contracting.
In industries characterized as "natural monopolies", the traditional argument had been that rate-of-return regulation (average-cost pricing) would be the best way to promote economic efficiency. This traditional view was set on its backside by the work of Telser and Demsetz, in different ways, arguing that the gubmnt can get out of the business of regulating firms by encouraging competition FOR the market as opposed to competition within a market.
Williamson, in a 1976 Bell Journal article, pointed out how this notion of "contestable markets" was very difficult to apply in the real world. He chronicled cable tv problems and noted that when a city let a contract to a company that promised the broadest service at the lowest price, the contract often had to be revised over and over again as the firm that won the contract repeatedly faced losses and imminent bankruptcy. Eventually, the gubmnt found itself constantly monitoring prices and terms of service to the point that it was, essentially, regulating the firm.
This careful work by Williamson challenged so much of what I had believed. By looking carefully at practical implementations, Williamson illustrated that the divide between privatization and regulation was not nearly so clean as I had hoped and deeply wanted to believe.
Co-naming him for the Nobel Prize in Economics was a good choice.