This slightly adds to the load on the main processor. These modems are popular as OEM products, so when you buy a new PC, chances are that your modem is winmodem. This greatly adds to the load on the main processor, which may be minimal on a 300MHz Pentium II, but, really slows down a Pentium 133. Cost - software modems are cheaper to manufacture. Size - with less chips required, software modems can be integrated on the computer motherboard, ideal for laptop computers.
Disconnections can be a problem if system resources are low.
For example, using more than 256 colour resolution can cause disconnection due to competition with the videocard for bus resources. In conclusion, software modems tend to be unreliable. A hardware modem offers more performance and reliability.