Note: At ArcGIS 9.2, Esri stopped selling ArcSDE as a stand-alone product. It is now integrated into both ArcGIS Desktop and ArcGIS Server as ArcSDE technology.
ArcSDE technology is a core component of ArcGIS Server. It manages spatial data in a relational database management system (RDBMS) and enables it to be accessed by ArcGIS clients. It is the technology that provides the framework to support long transactions, which facilitates the versioned editing environment in multiuser geodatabases. The geodatabase is the primary data storage model for ArcGIS; it provides a single central location to access and manage spatial data.
Learn more about how ArcSDE technology interacts with data stored in a geodatabase.