Definition from Wikipedia:
A softswitch, short for software switch, is a central device in a telecommunications network which connects telephone calls from one phone line to another, across a telecommunication network or the public Internet, entirely by means of software running on a general-purpose computer system.
What is a Softswitch:
It is software-based device in a telecommunications network which provides managing of voice, fax, data and video traffic, routing of a call within the network, and can process the signaling for all types of packet protocols. VoIP Softswitches are subdivided into two classes — class 4 and class 5 softswitches.
Class 4 Softswitch:
Class 4 VoIP softswitch is the kind of VoIP software which is used to transit VoIP traffic between the carriers. The main task of Class 4 softswitch is to maintain the uninterrupted routing of the large volumes of long distance VoIP calls. It is characterized by protocol and codec support and conversion, calls per second rate, number of concurrent calls, etc.
Class 5 Softswitch:
Class 5 VoIP softswitch is the kind of VoIP software which is intended for companies providing services for end-users. It is designed to work with residential and business clients. Class 5 softswitch is characterized by such services as calling features, IP PBX features, authorization types, etc.