Linux definitely replaced Unix servers. I remember calling Digital Equipment Corporation rep in the UK in 1994 for a quote for a server and was told I'd need to pay a minimum of 100,000 GBP for a minimum running config. That's 200,000+ GBP in today's money for something that had less power and storage than a RaspberryPi with an 32GB SD card. Yes, the price included the license for the operating system and the http server.
I was using VM systems running on PCS from 1989 (OS/2) Linux only started in 1991 and did not take off for say 10 years, by then Windows NT existed.
So VM was necessary for Linux but was not the reason for it taking off.
In my experience Linux came in for servers replacing other Unix servers. Windows NT servers continued for some time.
As for desktop you still need Excel and to a lesser extent Word and these are still best on Windows.