When a new product is created or upgraded, there are several stages in development before the product can be sold in the commercial marketplace. The first stage is the alpha stage, in which the product is tested by software testers within the company and debugged as necessary. A beta version is the name for the second stage of software testing, in which it is released for free or a reduced price to a group of users.

The beta version of a software release is considered to be a preview. It has all the standard features, but is not yet ready for wide release or sale. During this point, the company will collect feedback from users about the product's usability — what they like and what should be changed — before the product's wide release. A beta version of a program can be either a closed beta, which is limited to a specific group of users, or an open beta, which is available for the general public to use.

Though beta version products will often have all the features available in the final version of the product, they generally have limited, if any, technical support available to users. However, many products will often remain in beta version for years, during which time they are used by a wide audience as if they were full versions of products.

The word "beta" comes from the Greek, for the second letter in the alphabet. The term "beta version," or "beta test," originated with early hardware tests for IBM computers, where the beta test was used to examine whether the hardware properly performed all its listed functions.

Today, most software programs are first released in beta version before being marketed for general release. A beta version can also be applied to a website, which is testing its features and relying on audience feedback. Beta websites are frequently first shown on a secret domain that is only available to their test audience, before being transferred to their real domain for wide viewing.