A database is a tool to collect, store, sort, and manage your data. Databases consist of multiple pieces of information (called records) that are organized and grouped together. You'll often see these referred to as tables or spreadsheets, which are still considered a database, even if they collect and record in a small volume.
The history of databases begin with collection of information manually, via a pen and paper or punch card. In digital systems, the collection is stored in a computer's memory or a cloud. The computer program that manages the information in databases is called a database management system (DBMS). Sometimes the words "database" and "file" are used interchangeably, but a database may either refer to the content (the data itself) or to the DBMS software which stores and retrieves the data. There's now a market full of DBMS tools that run both on a computer itself, or using an enterprise cloud solution.
Databases are valuable because they serve is a single space to record business information up to date. This creates transparency and accountability, since there's a historical record of this information. It also empowers organizations with the knowledge to predict future trends and make decisions.
Databases vary in complexity. An example of a simple database would be an Excel or Google Sheet that tracks costs, earnings, and profit for a given day. This spreadsheet can then be used to generate insights into weekly earnings or losses, monthly, and over time, annually.
An example of a complex database would be a HubSpot CRM that tracks sales leads at a large organization. This database houses names, contact information, deal stage, customer value, and many more pieces of information, in addition to integrating with other tools to pull more information. It may, for example, integrate with your email platform, and pull insights and information from your email conversations, putting that back into the database.