Custom software (also known as bespoke software or tailor-made software) is software that is specially developed for some specific organization or other user. As such, it can be contrasted with the use of software packages developed for the mass market, such as commercial off-the-shelf (COTS) software, or existing free software.
Off-the-shelf software consists of a packaged software application available to a large audience with varying, albeit fundamentally similar needs. For example, Microsoft Word is designed for the mass public as a diverse solution to the many different needs of its users. It does not, however, cater to any specific entity like custom software would.
Customized software development entails the commissioning, development and release of a software product tailored to a single specific entity. The software is designed keeping the company’s infrastructure, branding and implementation needs in mind, implying it can only work for that organization.