Software Development Terms Every Business Owner Should Know

A few days ago I wrote about what an API actually is, using the same restaurant explanation I give clients who ask me to translate our own jargon back into English. That post came out of something I run into constantly: people who have a real idea and a real business, but who've never had a reason to learn the vocabulary that development teams use without thinking twice about it.

API was one word. It's nowhere close to the only one.

Over the years I've built up a mental list of the terms that come up in almost every project — the ones I find myself defining mid-sentence before I can even finish the question I was trying to ask. This post is that list, organized the way they actually show up in a project rather than alphabetically, so the terms that travel together are explained together.

You don't need to memorize any of this. You need enough of it that the next planning call sounds like a conversation instead of a lecture.

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How the Work Gets Organized

The words you'll hear before a single line of code gets written

Agile

A general approach to building software in small pieces, getting feedback quickly, and adjusting as you go — instead of planning the entire project up front and hoping nothing changes along the way. Almost every modern development process is "Agile" in some form; Scrum and Kanban below are two specific ways of practicing it.

Scrum

The most common way teams actually practice Agile. Work is broken into fixed-length chunks called Sprints (see below), with defined roles and a few recurring meetings — planning, a quick daily check-in, a review of what got done, and a retrospective on how the process itself is going.

Kanban

A different way of practicing Agile that skips fixed time chunks entirely. Instead, work items move across a visual board — usually something like "To Do," "In Progress," "Done" — with limits on how much can be in progress at once, so work keeps flowing instead of piling up.

Sprint / Sprint Review

A Sprint is a fixed period of work — one month or less, though most teams use one to two weeks — aimed at a specific goal. Nothing gets added to a Sprint once it's started without risking that goal. At the end, the team holds a Sprint Review: a checkpoint where completed work gets shown and discussed before the next Sprint begins.

Scope / Scope Creep

Scope is the defined boundary of what a project includes — the features, pages, and functionality everyone agreed to before work started. Scope creep is what happens when that boundary quietly expands after the fact: a "quick addition" here, one more feature there, none of it revisited against the original budget or timeline until the project is late and over cost.

This one comes up often enough that it's earning its own deep-dive post later in this series.

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How the Software Actually Gets Built

What's happening once development starts

Language

The specific syntax a developer writes in to give a computer instructions — Python, PHP, JavaScript, and so on. Different languages are better suited to different kinds of work; the choice usually says more about the type of project than it does about quality.

Library

A pre-written collection of code that already does something specific — process an image, format a date, validate an email address — so a developer doesn't have to build that functionality from scratch every time. Using the right library well is often a bigger productivity gain than writing more code faster.

Open Source

Software whose underlying code is publicly available for anyone to view, use, and often modify, usually under a specific license that spells out the rules. A huge amount of modern software — including tools we use daily — is built on open-source foundations.

Tech Stack

The full collection of technologies used to build and run a piece of software: the language, the framework, the database, where it's hosted. When someone asks what your "stack" is, they're asking what your software is actually made of and where it lives.

Spaghetti Code

Code that's grown tangled over time — pieces depending on other pieces in ways that are hard to trace, so a small change in one place risks breaking something unrelated somewhere else. It's usually the result of many quick changes made without stepping back to reorganize.

Refactoring

Restructuring existing code to make it cleaner and easier to work with, without changing what it actually does from the outside. It's cleanup, not a rewrite — the software behaves exactly the same after refactoring; it's just easier for a developer to safely change going forward.

Technical Debt

The future cost created by a shortcut or imperfect decision made now — similar to financial debt, where skipping something today means paying "interest" later in the form of extra work. Technical debt isn't always a mistake; sometimes it's the right short-term call. The risk is letting it pile up without ever paying it down.

This is one of the more business-relevant terms on this list — worth its own post later in the series.

Scalability

How well a piece of software holds up as demand grows — more users, more data, more traffic — without slowing down or falling over. A system built without scalability in mind can work fine at a small size and struggle badly the moment it succeeds.

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How It Ships

The mechanics of getting code from a developer's laptop into the real world

Git / Repository

Git is the system developers use to track every change made to a codebase over time — who changed what, when, and why. A repository ("repo") is the actual storage location holding that code and its complete history. Together they mean nothing gets permanently lost, and changes can always be traced or undone.

Push

Sending your local, saved changes up to the shared repository so the rest of the team can see them. This is a step in Git specifically — it is not the same thing as putting software on a live server. That's a separate step (deployment), and mixing the two up is one of the more common points of confusion for anyone new to how development actually works.

Continuous Integration (CI)

The practice of developers frequently merging their work into a shared codebase — often multiple times a day — with automated tests running each time to catch problems immediately instead of letting them surface weeks later. CI is about catching issues early; getting the resulting code live is a related but separate process usually called deployment.

Bug

An unintended behavior or flaw in software — something that doesn't work the way it's supposed to. A bug can be caught during development, during testing, or after something is live; it doesn't have to reach a customer to count as one.

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The Systems You Actually Touch

The software categories most business owners already use, even without knowing the category name

CRM (Customer Relationship Management)

Software that stores and organizes information about customers and prospects — contact details, communication history, deal stage — so a business can track relationships at a scale a spreadsheet stops handling well. HubSpot and Salesforce are two of the most common examples. It's also one of the systems we get asked to connect to everything else most often — see CRM automation.

CMS (Content Management System)

Software that lets someone create and manage website content without editing code. WordPress and Framer are common examples.

eCommerce Platform

Software that manages products, carts, checkout, payments, orders, and online sales in one system. Shopify, BigCommerce, and Magento are common examples.

POS (Point of Sale)

The system that processes in-person transactions — most commonly the register at a physical store — usually connected to the same inventory and order systems as the online store, so a sale on the floor and a sale online draw from one shared count.

LMS (Learning Management System)

Software used to deliver, track, and manage training or educational content — courses, quizzes, completion records, certifications. If your business runs internal training or sells a course, this is the category of tool doing the work behind it.

Middleware

Software that sits between two systems and helps them communicate or work together. A common pattern we build: HubSpot → Middleware → Recurly. The middleware receives data from HubSpot, transforms it into the format Recurly expects, validates it, applies business rules, and then sends it on. This is a specialty of ours — most of the custom middleware we build exists to automate exactly this kind of handoff between business and ecommerce systems.

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Getting Paid, and Getting It There

The commerce and logistics terms that show up the moment you start selling something

Merchant Processor

The company that actually moves money when a customer pays — authorizing the transaction, moving funds from the customer's bank to yours, and handling the technical side of card acceptance. Stripe, Authorize.net, and PayPal are common examples. It's a distinct role from your CRM or eCommerce Platform, though many platforms bundle a processor in by default.

3PL (Third-Party Logistics)

A company that stores your inventory and manages shipping on your behalf, rather than you handling warehousing and fulfillment yourself. We often connect a client's shopping cart directly to their chosen 3PL's system, so an order placed online triggers fulfillment automatically instead of someone manually forwarding it.

Duties and Taxes

When a shipment crosses an international border, a tariff, duty, and/or tax gets applied — the exact amount depends on the countries involved and the relationship between them. The part that actually matters for your business is deciding who pays. You can charge these fees to the buyer up front — often called Landed Cost, your product's price plus the fees required to deliver it — and arrange for a broker or carrier to settle them at entry, an arrangement known as DDP, Delivered Duties Paid. Skip that planning, and the buyer gets asked to pay before the package is released, often right at their door — a common cause of abandoned packages, canceled orders, and return fees.

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Trust and Compliance

The rules that apply the moment your software touches money or health data

PCI Compliance

Payment Card Industry compliance — the security standard for any organization that accepts, processes, transmits, or stores payment-card data. If your software touches card numbers anywhere in the flow, PCI requirements apply, which is part of why most businesses route card handling through a merchant processor rather than building that piece themselves.

HIPAA Compliance

The Health Insurance Portability and Accountability Act. In software terms, HIPAA becomes relevant the moment an application creates, receives, maintains, or transmits Protected Health Information (PHI) — commonly called ePHI once it's electronic — on behalf of a healthcare provider or another regulated organization. HHS describes HIPAA's Security Rule as requiring administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of that data.

Encryption

The process of converting data into a coded form that can only be read by someone with the correct key. It's what protects information — passwords, payment details, personal data — if it's ever intercepted or accessed without authorization.

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What the User Actually Experiences

Two terms that get used interchangeably and shouldn't be

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The New Category

The term that's become unavoidable in the last few years

LLM (Large Language Model)

The type of AI model behind tools like ChatGPT and Claude — trained on enormous amounts of text so it can understand and generate human language. When people talk about adding "AI" to a product today, there's a good chance an LLM is the specific technology doing the work under that label.

Where this goes next

More of These Are Getting Their Own Posts

A few of these terms come up often enough, or cost clients enough money when they're misunderstood, that they're worth more than a short definition. Scope Creep and Technical Debt are both strong candidates for their own posts later in this series — real stories, not just definitions. Tech Stack and CRM are close behind, since both come up directly in almost every project scoping conversation we have.

If API was the word that made me realize this series needed to exist, these are the words that convinced me it needed more than one post.

Common questions

Quick Answers

None of this is meant to turn you into a developer. It's meant to close the gap between what your team is saying and what you're actually able to follow — so the next time someone mentions scope creep, technical debt, or a sprint review, you're nodding because you understand it, not because you're hoping the meeting moves on.

If you're planning a software project and want to talk through it in plain language from the very first conversation, that's exactly what a Virgo Development Discovery Session is for. Ready to talk it through? Book a Discovery Call with me and the team.