Digital asset management is a broad term that covers a full spectrum of technology solutions from personal software for managing music files such as MP3s to enterprise server solutions for managing heterogeneous files types within a company. However, most digital asset management solutions include the following core capabilities:

Storage – How your assets are ingested, stored, and backed-up.
Retrieval – How your assets are accessed. This usually involves some sort of search and meta-data support. A DAM solution may also provide a taxonomy or classification system to facilitate consistent storage and the ability to browse assets by a well-defined vocabulary.
Delivery – How your assets are shared or delivered to clients, colleagues, and other interested parties. Many DAM solutions provide tools to facilitate sharing and distribution of your assets.

These core capabilities just scratch the surface of what digital asset management can do for you. Many enterprise-scale solutions offer the following extended capabilities as well: Workflow Automation (streamlining your digital workflow), Archival and Backups (disaster-proofing your digital assets), Usage Tracking (how, when, and where assets have been used both within and outside your organization), and E-commerce (selling your assets from a secure, online shopping cart).