A software modem is a low-cost alternative to a standard hardware-based modem. While hardware modems contain all the parts necessary to connect to the internet, the software version transfers some of that work to the computer's processor.
Modems have two main components: the controller configures and dials the modem, and the datapump sends and receives data. Depending on the type of software modem, either the controller or the datapump or both might be replaced by software.
Because it has fewer parts, a software modem is typically much less expensive than a hardware modem. Most modern personal computers have one built-in. It also requires less power than a standard modem, which can be a benefit for someone using a laptop computer that runs on a battery. They can also be easily upgraded simply by upgrading your software driver. And in the past, these modems could only be used for dial-up connections, but a DSL software modem is now an option.
The software modem has often been criticized for its drawbacks, though. Because it relies on the computer to perform many of its processes, it can be a drag on a computer's processor, leading to sluggish performance or disconnections. This can be particularly troubling for people who play games online, because the computer's resources can be spread too thin between the game and the Internet connection. And because of its reliance on software, a the modem can become corrupt or can conflict with other software. On older computers or on non-Windows® computers, there can also be issues with compatibility.
It is generally not too difficult to identify a software modem. If a modem specifically requires a certain operating system or processor, it's probably a software version. And they typically can only run with Windows®, so modem names containing the word "Win" can be a red flag.