It's actual operational testing by potential users/customers or an independent test team at the developers' site.
Alpha testing is internal acceptance testing, before the software goes to beta testing.
A product's beta is an officially released version of a product which includes most of the product's functionality. The beta version is intended for external testing of the product in order to identify configurations that cause problems, as well as collect requirements and suggestions from users.
In prototype model development approach this kind of testing is used.
Beta testing comes after alpha testing and can be considered a form of external user acceptance testing. Versions of the software, known as beta versions, are released to a limited audience outside of the programming team. The software is released to groups of people so that further testing can ensure the product has few faults or bugs. Sometimes, beta versions are made available to the open public to increase the feedback.
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