A "Custom Application" means, to me, something that is challenging to support. There may be only one person who understands it because they wrote it. If/when they leave the organization, that custom app is a liability waiting to bite a team, either through its failure, or through the inability to further modify it to meet new requirements.
In short, "custom app" often means "trouble".
But that applies to apps built outside of standards, and to teams that aren't properly staffed and funded. There are many custom apps that have no problems, that are continually modified to meeting changing requirements, which we never hear about--because they were created according to standards, and their staff is properly numbered and funded for training and design. They have enough depth that some people can change departments or even leave the company, and the app still is fully supported and retains utility and reliability.
"Custom App" may not only apply to something completely unique that was never "in the box." It can be an application with a specific, targeted use case, and not be flexible enough to handle other needs. Once upon a time, Excel was probably considered a "custom app" that was targeted solely at accounting types. Then others realized it would be helpful for managing inventory, organizing people, planning changes--heck, I recently ran into a video about a fellow they call "The Michael Angelo of Microsoft Excel", who does Master quality art using Excel. It's immediately obvious Excel left the realm of being a "custom app" generations ago. But when it was new, I'm betting there were plenty of people who thought inside the box, and put unimaginative limitations on how they would be able to use Excel.
So there it is--"custom application" must have some flavor of "limited use" to it. It solves only one kind of problem, or it has limited support, limited ability to be modified (or "de-customized") to serve other needs. It's likely to have a narrow user base (if not, it would have been exposed to bright people who would have asked "why can't it do . . . ?", and then learned enough about it to make it serve other needs--or they'd drop it in favor of something more flexible).
There's nothing wrong with a custom app that fills a specific need well. But apps become bloated when asked to do many things, to serve many needs. (They might just even be hiding a version of Flight Simulator, making them far bigger and complex. The moral of THAT story is to give credit where credit is due, and treat your employees as you'd like to be treated.) For an app to remain "custom" in my mind, it has these kinds of limitations.
