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Wiktionary
softmodem

n. (context computing English) A modem with minimal hardware capabilities, designed to use a host computer's resources to perform most of the tasks performed by dedicated hardware in a traditional modem.

Wikipedia
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.