Windows or cloud?
As suggested in previous comments: indeed MS doesn't want to kill Linux, they love Linux, and the revenue it can generate for them in the cloud. They've actually invested in quite some support for Linux in the likes of .NET Core, Visual Studio, VS Code, Azure,... They just realize that since Linux is popular for most modern type of workloads they cannot win this battle by pushing Windows as a bloated, costly, OS for serving these applications.
They also realize that the offering of Windows in a cloud-environment makes only sense for larger companies who had invested in Windows server applications in the past, but the majority of new players mainly look at the costs involved in developing and serving their modern applications, and here Linux is obviously cheaper. But since MS offers Linux in Azure, why should they care that they sell less Windows server licenses?
The total revenue of MS is bigger than ever, and this is without only selling Windows licenses in the cloud!
They just want to offer a nice and complete package for developers and companies so MS and Azure is the obvious choice, and not Google or Amazon.
The battlefield of the current age is not that of the desktop or server OS'es, that's so previous century, it's all about the cloud, and it only will increase over time!
Also most of their revenue-generating applications are now multi-OS (Office365, VS,...) so I'm pretty sure that they're preparing for a time when Windows won't even be an important player on the disappearing desktop environment anymore. Just betting on only Windows would for sure be suicide, since it is becoming less and less relevant, and they're smart enough to see this and act accordingly.