Code coverage testing involves "Dynamic Testing" methods of executing the product with pre-written test cases and finding out how much of code has been covered. If a better coverage of a code is desired, several iterations of testing may be required. For every iteration, one has to write a new set of test cases for covering those portions of code that were not covered by earlier test cases. To do such type of testing, not only does one need to understand the code and logic but also need to understand how to write effective test cases that can cover good portions of the code.

Understanding of code and logic means white box or structural testing whereas writing effective test cases means black box testing. So, what we need is in fact a combination of white box and black box techniques for test effectiveness. This type of testing is known as gray box testing'.

Thus we can say that

WHITE + BLACK = GRAY

What is Gray Box Testing?

Black box testing focuses on software's external attributes and behavior. Such testing looks at an application's expected behavior from the user's point of view. White box testing / glass-box testing, however, tests software with knowledge of internal data structures, physical logic flow, and architecture at the source code level. White box testing looks at testing from the developer’s point of view.

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Good information......... I came across some of the advantages and disadvantages of using gray box testing. Hope it will help you.

Advantages

§          Offers Combined Benefits – Leverage strengths of both Black Box and White Box testing wherever possible.

§          Non Intrusive – Gray Box does not rely on access to source code or binaries.  Instead, based on interface definition, functional specifications, and application architecture.

§          Intelligent Test Authoring – Based on the limited information available, a Gray Box tester can author intelligent test scenarios, especially around data type handling, communication protocols and exception handling.

§          Unbiased Testing – The demarcation between testers and developer is still maintained.  The handoff is only around interface definitions and documentation without access to source code or binaries.

Disadvantages

§          Partial Code Coverage – Since the source code or binaries are not available, the ability to traverse code paths is still limited by the tests deduced through available information.  The coverage depends on the tester authoring skills.