In this type of testing, the software is distributed as a beta version to the users and users test the application at their sites. As the users explore the software, in case if any exception/defect occurs that is reported to the developers. Beta testing comes after alpha testing. Versions of the software, known as beta versions, are released to a limited audience outside of the company.
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 field to a maximal number of future users.