Softmodem
A softmodem (software modem) is a modem with minimal hardware that uses software running on the host computer, and the computer's resources (especially the central processing unit, random access memory, and sometimes audio processing), in place of the hardware in a conventional modem. Softmodems are sometimes called winmodems because the first ones worked only on IBM PC compatible computers with a Microsoft Windows operating system.
Softmodems cost less to manufacture than conventional modems because they had less hardware. However, they shared the computer's limited resources with other tasks, which reduced the resources available to, and sometimes the performance of, the computer's primary tasks.
Evolution and technology
As PSTN hardware modem technology advanced, the modulation and encoding schemes became increasingly more complex, thus forcing the hardware used by the modems themselves to increase in complexity.
The first generations of hardware modems (including acoustic couplers) and their protocols used relatively simple modulation techniques such as FSK or ASK at low speeds and with inefficient use of the telephone line's bandwidth. Under these conditions, modems could be built with the analog discrete component technology used during the late 70s and early 80s.