Prioritizing the product backlog is an important step to make sure the agile software development team is focused on the correct set of user stories. The initial product backlog can consist from a few user stories to several hundred. Trying to prioritize several hundred user stories is a huge task that can be simplified by using MoSCoW ratings.
MoSCoW ratings defined:
M - MUST have this feature – the product will fail to meet needs without this
S - SHOULD have this feature – an important feature that has an acceptable work around
C - COULD have this feature – wish list item
W - WON'T have this feature at this time – might move to Must, Could or Should in the future.
Product owners and business folks seem to understand this approach and find it easier to deal with a large product backlog by using MoSCoW ratings.
Once a user story is MoSCoW rated only the Must user stories need to be prioritized. The rest of the user stories are not MoSCoW rated high enough to warrant the effort to do a numerical prioritization. That said, MoSCoW ratings on user stories can change over time, what was once a Must can become a Could or Should and so on…
Assigning a user story a MoSCoW rating is a quick and dirty way to quickly narrow down on what is important to deliver to make the product a success.