Definitions:
Capability of a product to exchange information with other products, and/or to perform its required functions while sharing the same common environments and resources.
Software compatibility is a characteristic of software components or systems which can operate satisfactorily together on the same computer, or on different computers linked by a computer network. It is possible that some software components or systems may be compatible in one environment and incompatible in another.
Capability of a program to be executed on different types of computers without modification of the program or the computers.
modified from Wikipedia
a state in which two things are able to exist or occur together without problems or conflict.
Oxford Dictionary
A family of computer models is said to be compatible if certain software that runs on one of the models can also be run on all other models of the family.
Incompatibility
Software incompatibility is a characteristic of software components or systems which cannot operate satisfactorily together on the same computer, or on different computers linked by a computer network.