“Applications” doesn’t seem to be particularly new to me: e.g., Rapid Application Development (RAD) tools like Delphi and Visual Basic were fairly popular in the 90s. And, the jargon file attests to the use of the term to signify programs for non-developers going as far back as 90: http://www.catb.org/jargon/oldversions/jarg211.txt

The suits tried to get people calling what they sold "applications" right from the beginning. "Nobody will pay for a program, but they will pay anything for an application." Back then, an application was, literally, what you were using the computer to get done: a spreadsheet would be a program, budgeting an application. The suits bought and sold "applications"; users ran programs.

Then Eternal September happened, there were too few to push back, and all the other stuff paying customers used to demand--training, printed manuals, not crashing all the damn time--fell away, and finally the program became, itself, the whole application.

Then the users needed an abbreviation for what it was that was crashing: the "app".

In the 80's, I wasted far too much time writing PROGRESS 4GL "Applications", which was 4GL code applied to a particular database ..