A custom script is anything that could be executed inside a VM:

As you can see, a custom script is more or less a PowerShell script that turns on additional software components or installs third-party software solutions after the VM has been installed.

Let's look at the concept of minimizing the TCOs of setting up and updating individual VMs. We talked about downloading a generic VM template for Windows from Azure and defining the portions of a VM to make it your VM; this is the correct point to run the corresponding scripts to make a default VM template specific to your company.