Linux was developed along the lines of UNIX and as such is proported to be a collection of useful utilities. You install the kernal when you install Linux and the kernal contains the most basic functionality for the operating system, such as providing input/output and processing capability.
Linux is a multi-user network OS so after installing the kernal you add functionality by installing packages, such as a package for web server functionality. The Linux kernal is basically the same regardless of the Linux distribution and is freely available; Linux is open source.
The Linux kernal requires a much smaller footprint than the Microsoft Windows kernal, which contains everything under the sun whether the user needs the functionality or not.