Spreadsheets vs. custom software
Spreadsheets aren't the enemy. The problem shows up when they get used for something they were never meant to do.
Spreadsheets are probably the most widely used management tool in the world, and for good reason: they're flexible, everyone knows how to use them, and they require no development at all. The problem isn't the spreadsheet itself — it's the point where it starts doing a job it was never designed for.
Spreadsheets work well when the data volume is manageable, when a single person or a small, easily coordinated group uses them, and when mistakes have minor consequences. They work poorly when several people edit the same file at once (versions overwrite each other), when volume grows so much that opening the file gets slow, or when a formula error can affect a business decision without anyone noticing.
The clearest sign a spreadsheet has hit its limit isn't its size — it's how many people depend on it being right, with no automatic validation in place. If a mistake in one cell can mean selling something you don't have in stock, or billing a customer incorrectly, the cost of that error is no longer proportional to the cost of replacing the spreadsheet with a system that has its own rules and checks.
Custom software doesn't replace spreadsheets across the board: they're still an excellent tool for one-off analysis, ad hoc reports and exploratory work. What it replaces is using a spreadsheet as the operational database the business depends on every single day — that's where a system of its own, with permissions, validation and history, starts to pay for itself.