Concept of Database and Instance

Concept of Database and Instance Database Management System (DBMS) encompasses database and instance A Database is a set of physical files that store application and system data An instance consists of the hardware resources of the system (primarily memory and CPU utilization) that facilitates data access for the end-user
StoragePCDataServerCPUCPUProcessProcessProcessProcessMemoryDataDataSystemLogCLIENTDATABASEINSTANCEControlTemp

source MS MVA