“Oh my gawd!!!” cried Chicken Little a few years ago. “Microsoft bought Great Plains! It’s the end of third-party accounting packages! And oh, by the way, the sky is falling too.”

If you haven’t noticed, the sky hasn’t fallen yet (although that pesky ozone hole keeps growing) and Microsoft is still just another player in the low-end business software marketplace. What happened?

What happened is one of life’s little ironies. Start by recognizing that Microsoft is in the platform business. It does a pretty good job at it, too. The business, that is — form your own opinion about the platforms themselves.

Microsoft Windows is a platform — two actually, desktop and server. Visual Basic and Studio, Exchange, SQL*Server, and BizTalk all live in the platform layer, because you build things on them. That’s what platforms are. Microsoft Office is, if you squint, a platform, too. You build things on it — documents, presentations, and financial models for the most part. They’re simple compared to, say, an ERP suite, but they’re still applications of a sort, built on a platform of a sort.

Microsoft is in the platform business. The major ERP suites have become platforms, and as a result Microsoft probably thought its acquisition of Great Plains was a natural fit. It’s a syllogism: All ERP suites are platforms, Great Plains is an ERP suite, therefore Great Plains is a platform.

Except for one detail: Not all ERP suites are platforms. You might not agree that any of them are. If you don’t, you’re half right: They aren’t necessarily platforms, but they can, and probably should be. It’s up to the company implementing ERP to decide whether it’s going to be a platform or an application.

Imagine you’re in charge of IT for a Fortune 1000 company. You’ve implemented one of the big three — SAP, Oracle or PeopleSoft. Is it an application or a platform?

Before answering: Everyone who just groaned and said, “This is just semantics,” go to the blackboard (if you can find one — otherwise use a whiteboard) and write, 50 times, “Words reflect ideas. Ideas drive action. That makes semantics important.”

I feel much better now. Back to business. Is your ERP suite an application or a platform? It depends. When IT is called on to provide new or different functionality to the enterprise, does it figure out which module to add to those already installed, what customizations or configuration changes to make, and if there is new functionality to create from scratch, how to leverage the ERP suite to the extent possible in building what’s needed?

Or does IT buy a suitable application, or build one using a standard set of development tools if there’s nothing suitable to be found in the marketplace, and then integrate it as well as possible?

For a Fortune 1000 company, the first answer, in which IT treats the ERP suite as a platform, usually makes better business sense, because it results in a better integration and a more straightforward architecture. And in a Fortune 1000 company, poor integration and bad architecture are two big problems, because they make every project cost a lot more and take a lot longer than it otherwise would.

Now, imagine you’re in charge of IT for a Fortune 100000 company, assuming there even is such a thing. Your whole IT department consists of four people, and you write code when you aren’t managing a project or consulting with one of the business managers. You implemented Great Plains Accounting. Now the business needs something else.

If there’s a Great Plains module that does the job without having to make too many compromises on features and functionality, you’ll probably choose it, but that’s about it. Great Plains isn’t a development platform the way SAP is. It’s just an application. Nor, in a small business, are strong architecture and tight integration as important as they are in a big one.

And if the small business grows to a point where it needs to manage its architecture more formally and achieve tight integration, it will find itself outgrowing Great Plains at around the same time.

It’s ironic. Poor Microsoft bought an ERP suite, probably figuring it could do for (to?) the small and middle market what SAP did in bigger companies: Sell an application that becomes a platform, thereby extending its control of the architecture. Instead, it just has an accounting package and some other stuff to sell.

I’d be crying in my beer, if I had a beer in front of me.