Linux was already used heavily long before "cloud" computing became a coined term. Not just for cheap hosting providers either, in the early 00s Linux dominated the 500 super computers. I also remember repairing an enterprise satellite box in 2002 which ran Linux.
You're right that those law suits were settled long before Linux gained momentum though. FreeBSD and NetBSD were released after Linux and their predecessor (386BSD) is very approximately as old as Linux (work started on it long before Linux but it's first release was after Linux). As far as I can recall, 386BSD wasn't targeted by lawsuits.
Also wasn't BSD used heavily by local ISPs in the 90s?
In any case, I think Linux's success was more down to it being a "hacker" OS. People would tinker with it for fun in ways people didn't with BSD. Then those people eventually got decision making jobs and stuck with Linux because that's where their experience was. So if anything, Linux "won" not because it was "better" than BSD on a technical level but likely because it was "worse" which lead to it becoming more of a fun project to play with.
You're right that those law suits were settled long before Linux gained momentum though. FreeBSD and NetBSD were released after Linux and their predecessor (386BSD) is very approximately as old as Linux (work started on it long before Linux but it's first release was after Linux). As far as I can recall, 386BSD wasn't targeted by lawsuits.
Also wasn't BSD used heavily by local ISPs in the 90s?
In any case, I think Linux's success was more down to it being a "hacker" OS. People would tinker with it for fun in ways people didn't with BSD. Then those people eventually got decision making jobs and stuck with Linux because that's where their experience was. So if anything, Linux "won" not because it was "better" than BSD on a technical level but likely because it was "worse" which lead to it becoming more of a fun project to play with.