Why this matters
One huge database holds everything: users, orders, products, reviews, notifications, sessions. As the company grows, this DB becomes the bottleneck — every team's slow query affects everyone, schema changes touch everyone, scaling means scaling for the noisiest workload.
Database federation (also called functional or vertical sharding) splits the data by function: users go in one DB, orders in another, products in a third. Each tuned for its workload. Each scaled independently. Distinct from horizontal sharding, which splits a single table across nodes by row.