It’s a mix, some leveraging purely Office 365 services, AzureAD for identity, Sharepoint for file storage, Teams for phones, etc.
Others switched from full endpoints to thin clients in the office.
Others switched to BYOD and work from home, no office setting at all.
The only client we have that has a VM in the cloud is using that as a clone of an on-prem quickbooks server, it’s cheaper to host it in AWS than it is to run it on-prem with full image level backups and DR capability. They are moving to quickbooks online soon so that will be the last VM/Physical server client that I manage.