Database sharding is a technique used to improve the performance and scalability of databases by dividing them into smaller, more manageable pieces called shards. Each shard contains a subset of the data, allowing for parallel processing and reducing the load on any single server. This approach helps to distribute the data across multiple servers, making it easier to handle large volumes of transactions. By implementing sharding, organizations can enhance their database's efficiency and speed, especially as their data grows. It also allows for better resource utilization, as different shards can be stored on different servers, optimizing performance and ensuring that no single server becomes a bottleneck.