Microsoft has Built its own Linux Operating System

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Microsoft has built its own Linux-based operating system called Azure Cloud Switch (ACS).

According to the announcement made through an official blog post on Microsoft website, Azure Cloud Switch (ACS) describes as "cross-platform modular operating system for data center networking built on Linux." or Simply, "Commodity switch software stack for data center networks".
The Purpose of developing Linux-based Azure Cloud Switch (ACS) operating system at Microsoft is to make it simpler to control the hardware from multiple vendors (such as Switches) that powers their cloud-based services.

However, Microsoft's Linux distribution is not going to appear on Desktops or Servers anytime soon, because this isn't a typical consumer-grade Operating System.

For Now, Azure Cloud Switch (ACS) Linux OS is just an internal tool that Microsoft uses to "debug, fix as well as test software bugs much faster", scale down software and develop features for enterprise and cloud computing services.

Microsoft Azure Cloud Switch (ACS) was demonstrated at the SIGCOMM conference in August 2015.
This move by Satya Nadella's Microsoft is really significant.
If you’re interested in the technical deep dive into Azure Cloud Switch (ACS), you will find it on the Microsoft Azure blog.
 
Azure was developed way back in 2005 but MS didn’t openly announce it was modified Linux distro. Almost all Server OS use Linux distros. I think Win 10 also has linux kernel embedded within NT kernel which would explain revising the kernel version was deemed necessary.
 
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