First it has nearly sealed off the 'cloud' from Microsoft. Sure there is Azure, and you can ask many VPS providers to put Windows into the box, but Linux system images dominate the 'cloud' OS space by a large margin. So a lot of what Microsoft used to sell as 'back office', aka an NT server for a small business running exchange and maybe Access is shifting over to gmail + AWS.
The other place its getting crushed is of course mobile phones. If it weren't for licensing revenues from patents the Android (and Linux kernel) would be doing more financial damage, as it is, the number of 'seats' which run the operating system of choice are running a Linux derivative. We've talked about how this is the 'post PC' era, and it is, and the Post PC, whether it is your Samsung 'smart TV' or your phone, predominantly doesn't pay Microsoft an OS tax.
So revenues that Microsoft used to get for OS installs are now time limited patent licenses.