Zoning in a SAN is a used to segment traffic between targets and initiators, or less formally workstations and storage. Zoning is generally used for security or performance benefits.
Zoning can be set up through software, referred to as Soft Zoning or it can be set up through hardware, referred to as Hard Zoning.
Soft zoning can be used if you want zones to be able to overlap, as in 'Workstation X' should be in Zone 1 and Zone 2. This flexibility can be nice depending on application and is often based on the World Wide Name (WWN) of the Host Bus Adapter (HBA), which is the PCIe interface for fibre channel connectivity.
Hard zoning does not allow for zones to overlap. So in the example above 'Workstation X' would need to be in Zone 1 or Zone 2, but could not be in both.