I don't think Microsoft would intentionally compete with Windows, but it does seem as though they are preparing for a world where Windows is no longer their golden goose, or at least hedging their bets. Given that Windows has already decisively lost the battle for servers, this seems prudent.

Little harder to pull that off when the key components are all GPL licensed, but also all of Microsoft's bits and pieces for their distro seem to be MIT Licensed. Honestly, it certainly feels more like Google lives by Embrace, Extend, Extinguish (email, browsers, video streaming, etc).

Not really. They've always advertised it for, well, Azure, and the actual announcement[0] makes it clear that it's simply a distro for Azure workloads. Considering they state it's "built exclusively for cloud and server workloads, it is not intended to support desktop usage or GUI applications," Microsoft isn't playing that game here.

[0] https://techcommunity.microsoft.com/blog/linuxandopensourceb...

Extinguish Windows morelike...

As a Fedora hater, I'm also happy it's RPM based; IMO, .debs are just flat out worse than .rpm as a format and the tooling on top matches that. I do wonder, though:

> Azure Linux 4.0 is derived from Fedora, right now a Fedora 43 snapshot, rather than assembled package by package the way 1.0 through 3.0 were.

Then what's the point? They could just ship Fedora. There are minor differences, but all things that sound easy to get upstreamed with minimal effort.