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Application Fabrication refers to the process where computer applications are built by searching, matching, customizing, morphing, gluing, and hosting existing applications together.
We have seen generations and generations of operating systems out there, that we keep upgrading our computers with, but we seldom "directly" use these operating systems. What we need is computer applications that really help in our personal information management, business processes, etc.
In the open source era, where you can easily find hundreds of say content management systems, or customer relation management system, or human resource systems, we can either use them alone, or can "glue" them together via SOAP, XML, or other glueware, to fabricate new applications.
In the eighties, we call that system integration, and now with the advances of technologies, multicore CPUs, open source foundries, virtual machine technologies, a proliferation of glueware technologies and standards, that we can actually "fabricate" more and more applications based on an evolving layers of existing applications and the new app's can then feed back into the ecosystem for recycling.
There is earlier citation for Business Application Fabrication  which largely refers to how to build application using Microsoft .Net application development environment only, and does not have the "glue" concept for a variety of large application objects/systems.
It seems natural we started developing software independently by weaving lines and lines of codes together, to the era where we group together independent developers via forges like , and then the resulting applications being "fabricated" together to create new applications.