Software Application: A software developed depending on a specific customer requirements is called as application or project.

Examples: Any application that will be used only in that organization. OR Software developed to use with in the organization only. They won’t share it to out side world.

Software Product: A software developed depending on overall requirements in market is called as software product.

Examples: SQL Server, Visual Studio, Adobe Photoshop, Google search engine, Gmail and etc… which will be accessible to the outside world.