Outbound: the product connects to another system or component, and it contains hard-coded credentials for connecting to that component.
In the Inbound variant, a default administration account is created, and a simple password is hard-coded into the product and associated with that account. This hard-coded password is the same for each installation of the product, and it usually cannot be changed or disabled by system administrators without manually modifying the program, or otherwise patching the product. If the password is ever discovered or published (a common occurrence on the Internet), then anybody with knowledge of this password can access the product. Finally, since all installations of the product will have the same password, even across different organizations, this enables massive attacks such as worms to take place.
The Outbound variant applies to front-end systems that authenticate with a back-end service. The back-end service may require a fixed password which can be easily discovered. The programmer may simply hard-code those back-end credentials into the front-end product. Any user of that program may be able to extract the password. Client-side systems with hard-coded passwords pose even more of a threat, since the extraction of a password from a binary is usually very simple.
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