A Softphone is a software application that is used to make phone calls over internet that works based on VoIP. It is a virtual telephone without any requirement of separate hardware and it can be used by plugging just the headset to the sound card of our computer.

SIP stands for Session Initiation Protocol which is a set of rules that can be adopted in order to initiate a connection between two applications on different computers. It can also be adopted for dynamic interactions such as to modify or terminate the connections among different computer applications over the internet. Different computers on the internet use different applications and operating systems, hence SIP is important in order to establish a connection between such applications. If those applications are based on SIP then they can dynamically connect and interact with each other and one of best examples for this would be that of Video Conferencing. SIP is ubiquitous in controlling communication through multimedia such as video and voice signals which are being transferred based on Internet Protocol.

An SIP based softphone is an application where voice signals are controlled as per Session Initiation Protocol. You can easily understand the importance of rules of grammar in English language. Similarly, SIP serves the purpose of establishing a standard for controlling communication among two or more applications. With the use of softphone, you can make free calls to the same application on other computers by making use of Internet Telephony Service Provider (ITSP).

One of the very popular softphone that you might have already used is Google Talk but it is based on a different protocol called Extensible Messaging and Presence Protocol (XMPP). Hence, Google Talk cannot be used to make calls to SIP based applications. SIP based devices or applications are very popular in commercial market and applications are based on Session Initiation Protocol for business purposes in general.

SIP Softphone is a very handy software that can be used to make calls to another computer for free. But calls to a normal telephone from an SIP Softphone are gaining popularity although they are not always for free.