From Chris Andersens's Long Tail blog:
The Long Tail of software

Joe Kraus, one of the founders of Excite, has a new company that's based on what he calls the Long Tail of software. Called JotSpot, it's building a wiki-like platform that makes it easy for firms to create custom applications for their specific business needs, much as they do with Excel spreadsheets today. He briefed me about this some time ago, but I wasn't able to talk about it until now. Fortunately, he's done all the talking for me with a really interesting post on his own blog that nicely shows how broadly the Long Tail theory can be applied.

The long tail doesn’t just apply to music and movies. There’s a long tail for software as well. Here’s why.

First, every business has multiple processes. Things like hiring, firing, selling, ordering, etc. Second, while some of these are pretty common in name from business to business (recruiting, for example), in practice, they are usually highly customized. Finally, there are simply a large number of processes that are either unique or that are common to millions of very small markets and therefore not traditionally worth the effort to buy software for (for example, the process by which an architecture firm communicates between it’s clients and the city planning office).

These three facts

every business has multiple processes
processes that are similar in name between businesses are actually often highly customized
there exist a large number of processes unique to millions of small clusters of industries.

means that there is a combinatorial explosion of process problems to solve and, it turns out, little software to actually support them.

Said another way, there is a long tail of very custom process problems that software is supposed to help businesses solve.