Packaged software is a large component of the global market for software but to-date research into software development practices has mainly been driven by the interests of the developers of custom software. This paper examines the development of packaged software and focuses on the key area of difference between this and the development of custom software – user / customer participation. Partnerships being established between packaged software developers and their customers to develop the packaged software product are examined. A synthesis of associated literature is provided and a simple model for understanding the motivations of developers and customers in establishing close relationships is proposed.