COTS (commercial off-the-shelf) is a term that gets thrown around a lot in the embedded computer industry, particularly on the hardware side. COTS products are optimized for efficient, sometimes volume, production and come with a predetermined amount of functionality and I/O capabilities designed to meet the majority of computing needs of a broader market.
When application requirements call for modifications that go beyond what the COTS board can support, then you move into the full custom solution. The levels of customization can vary greatly, depending on the needs of the application.
(Shared with permission: Embedded Computing Design–www.embeddedcomputing.com).