I don't buy this entirely. I'd agree it ate into the market share, yes of course it did. And the blurring of commodity server and desktop hardware ate further.
What Linux didn't replace was accountability: there were plenty of shops which needed hardware vendor supplied and supported OS. It wasn't a technical decision, but a checkbox their customers demanded as some sort of due diligence checkbox. Then Redhat arrived on cheap hardware and ate into that share further, because they checked some of the boxes.
Sparc and Solaris was still technically superior for some things and still had all the throats to choke.
What changed for Sun was Oracle buying them: jacking prices; buying all the competitors to control them like Sleepycat, TimesTen, and MySQL; suing customers; suing security researchers; suing benchmarkers; and charging triple (not an exaggeration) to reinstate lapsed support contracts etc etc.
"We're a Sun Shop" was not longer the appeal it once was on the server, and of course nobody would need a desktop Sun with those downsides.