Custom software development is the process of designing, creating, deploying and maintaining software for a specific set of users, functions or organizations. In contrast to commercial off-the-shelf software (COTS), custom software development aims at a narrowly defined set of requirements. COTS targets a broad set of requirements, allowing it to be packaged and commercially marketed and distributed.

Microsoft Office and Sitebuilder.com, for example, are packaged commercial software products and services. They meet the generalized needs of office productivity and website creation.

Custom software, on the other hand, is designed for a specific set of needs, such as:

a field service equipment maintenance program for a manufacturer or an online banking app designed for the unique requirements of the bank and its customers. Custom software, and its development, is also referred to as bespoke software. The term has its origins in old English and the tailoring trade. Think tailor-made suit.

Custom software development is usually performed by in-house development teams or outsourced to a third-party. The same processes and methodologies apply to custom software development as other types of software development. A custom project would move through the familiar steps of requirements gathering, code construction, testing and deployment and apply the same methodologies, like Agile, DevOps or Rapid Application Development, as any other software project.

Efforts associated with custom software development include application customization, application modernization and application management. Application customization refers to modifying COTS applications to support individual requirements. Application modernization plays a critical role in maintaining the viability of a business’s custom software to meet evolving user and market demands. Application management makes software effective by supporting tasks like installation, updating, performance and availability optimization, and service desk functions.