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A softswitch is a central device in a telecommunications network which connects telephone calls from one phone line to another, typically via the internet, entirely by means of software running on a general-purpose computer system. Most landline calls are routed by purpose-built hardware, formerly using physical switchboards, but softswitches are the dominant 21st century trend. 
Although the term softswitch technically refers to any such device, it is more conventionally applied to a device that handles IP-to-IP phone calls, while the phrase "access server" or "media gateway" is used to refer to devices that either originate or terminate traditional "land line" (hard wired) phone calls. In practice, such devices can often do both. As a practical distinction, a Skype-to-Skype phone call is entirely IP (internet) based, and so uses a softswitch somewhere in the middle connecting the calling party with the called party. In contrast, access servers might take a mobile call or a call originating from a traditional phone line, convert it to IP traffic, then send it over the internet to another such device, which terminates the call by reversing the process and converting the Voice over IP call back to ISDN digital or analog/PSTN format, and connecting it to a destinationphone number.
A softswitch is typically used to control connections at the junction point between circuit-switched and packet-switched networks. A single device containing both the switching logic and the switched fabric can be used for this purpose; however, modern technology has led to a preference for decomposing this device into a Call Agent and a Media Gateway.
The Call Agent takes care of functions such as billing, call routing, signaling, call services and the like, supplying the functional logic to accomplish these telephony meta-tasks. A call agent may control several different media gateways in geographically dispersed areas via a TCP/IP link. It is also used to control the functions of media gateway, in order to connect with media as well as other interfaces. This procedure is utilized to keep the interfaces clear as crystal for receiving calls from any phone lines.
The Media Gateway connects different types of digital media stream together to create an end-to-end path for the media (voice and data) in the call. It may have interfaces to connect to traditional PSTN networks, such as DS1 or DS3 ports (E1 or STM1 in the case of non-US networks). It may also have interfaces to connect to ATM and IP networks, and the most modern systems will have Ethernet interfaces to connect VoIP calls. The call agent will instruct the media gateway to connect media streams between these interfaces to connect the call - all transparently to the end-users.
The softswitch generally resides in a building owned by the telephone company called a central office. The central office will have telephone trunks to carry calls to other offices owned by the telecommunication company and to other telecommunication companies via the PSTN.
Looking towards the end users from the switch, the Media Gateway may be connected to several access devices. These access devices can range from small Analog Telephone Adaptors (ATA) which provide just one RJ11 telephone jack to an Integrated Access Device (IAD) or PBX which may provide several hundred telephone connections.
Typically the larger access devices will be located in a building owned by the telecommunication company near to the customers they serve. Each end user can be connected to the IAD by a simple pair of copper wires.
The medium-sized devices and PBXs are most commonly used by business that locate them on their own premises, and single-line devices are mostly found at private residences.
At the turn of the 21st century with IP Multimedia Subsystem (or IMS), the Softswitch element is represented by the Media Gateway Controller (MGC) element, and the term "Softswitch" is rarely used in the IMS context. Rather, it is called and AGCF (Access Gateway Control Function).
The feature server, often built into a call agent/softswitch, is the functional component that provides call-related features. Capabilities such as call forwarding, call waiting, last call return and three way videoconferencing, if implemented in the network, are implemented in the feature server. The feature server works closely with the call agent, and may call upon the media server to provide these services. These features do not require the subscriber to explicitly request them but tend to be triggered within the call handling logic.
VoIP Softswitches are subdivided into two classes. Class 4 softswitches and Class 5 softswitches.
Softswitches used for transit VoIP traffic between carriers are usually called class 4 softswitches. Analogous with other Class 4 telephone switches, the main function of the class 4 softswitch is the routing of large volumes of long distance VoIP calls. The most important characteristics of class 4 softswitch are protocol support and conversion, transcoding, calls per second rate, average time of one call routing, number of concurrent calls.
Class 5 softswitches are intended for work with end-users. These softswitches are both for local and long distance telephony services. Class 5 softswitches are characterized by additional services for end-users and corporate clients such as IP PBX features, call center services, calling card platform, types of authorization, and other features similar to other Class 5 telephone switches.
While Cisco has come to dominate the media gateway market with their AS5X line of access servers, the softswitch market is highly fragmented, with many companies producing a variety of overlapping products. Because SIP calling has come to dominate the telecommunications world, most companies compete in that arena.
Due to the high costs of infrastructure and its maintenance, some softswitch solutions are now offered through a Hosted service provider model. Users rely on softswitch infrastructure managed by a third party to deliver services to their end users without owning or operating their own softswitch.