Hardware and software encryptions do essentially the same thing, but a Hardware Security Module (HSM) will allow a server to function much faster, improving response time and allowing for stronger encryptions.
Wikipedia
A hardware security module (HSM) is a physical computing device that safeguards and manages digital keys for strong authentication and provides cryptoprocessing These modules traditionally come in the form of a plug-in card or an external device that attaches directly to a computer or network server A hardware security module contains one or more secure cryptoprocessor chips