Application :

Application is a collection of tabs. There are two types of application they are Standard Application and Custom Application.

Standard Application : 

Applications created by the salesforce that is default are called standard Application. These applications can be customized but cannot be deleted. Example : Sales ,CallCenter,Marketing and so on.

Custom Applications :

When users create the applications those applications are called custom Applications. These applications can be deleted or Customized as per business requirement.

Steps to Create Custom Applications:

Classic: 

1.Click on Setup

2.Click on Build

3.Click on Create

4.Click on Apps

5.Click on New Application

6.Choose Application Type: Custom App

7.Enter Application Details:

App Label: Account Management

App Name: Account_Management_App

8. Choose the Logo for application: 

Application Logo should Externally available Image within the document. Size should be more than 3KB less than 20KB. Width and Height should be 300px and 55px.  

9.Choose the tabs: 

Choose the tabs that ought to be visible within the application.

Choose the Default Landing tab. Tab, which is chosen as default landing tab,Content of that tab will be visible on the homepage of the application.

Example: Choose Lead,Account,Contact,Opportunity

10.Choose the profile for whom the application should be visible.

Example: System Administrator 

Default Landing : Account

Application will be visible to the users on the UI with App Label. If we want to refer to the application programmatically then we use an app name.

Lightning:

1.Click on Setup

2.Click on Platform Tools

3.Click on Apps 

4.Click on App Manager

5.Click on New Lightning App

6.Enter AppDetails, Enter App Name as Mutual Funds, Developer Name as Mutual_Funds, Enter Description and Choose the Logo.  

7.Choose the Navigation Type and Choose Navigation as Standard Navigation

8.Choose Utility Bar items and Choose Chatter, History

9.Choose the tabs for the application and choose tabs as Account,Case and Contact.

10.Choose the profile for whom the application should be visible.

Example: System Administration

The number of Custom applications we can create is based on the editions. For Developer edition you can create up to 10 Applications, for Enterprise Edition it is up to 10 Applications and for Unlimited Edition you can create Unlimited Applications.

Steps to upgrade the classic application as Lightning version: 

Lightning:

1.Click on Setup

2.Click on Build

3.Click on Create

4.Click on Apps 

5.Click on Choose the application

6.Click on Edit

7.Click on Enable Show in lightning version

Classic versions of the appliance still remain an equivalent ,but another instance of the appliance within the lightning version is going to be created.