|MS SQL Server 2012 - DBA Articles|
Window vs. SQL Authentication Mode
During setup, you must select an authentication mode for the Database Engine. There are two possible modes: Windows Authentication mode and mixed mode. Windows Authentication mode enables Windows Authentication and disables SQL Server Authentication. Mixed mode enables both Windows Authentication and SQL Server Authentication. Windows Authentication is always available and cannot be disabled.
Configuring the Authentication Mode
If you select Mixed Mode Authentication during setup, you must provide and then confirm a strong password for the built-in SQL Server system administrator account named sa. The sa account connects by using SQL Server Authentication.
If you select Windows Authentication during setup, Setup creates the sa account for SQL Server Authentication but it is disabled. If you later change to Mixed Mode Authentication and you want to use the sa account, you must enable the account. Any Windows or SQL Server account can be configured as a system administrator. Because the sa account is well known and often targeted by malicious users, do not enable the sa account unless your application requires it. Never set a blank or weak password for the sa account.
Connecting Through Windows Authentication
When a user connects through a Windows user account, SQL Server validates the account name and password using the Windows principal token in the operating system. This means that the user identity is confirmed by Windows. SQL Server does not ask for the password, and does not perform the identity validation. Windows Authentication is the default authentication mode, and is much more secure than SQL Server Authentication. Windows Authentication uses Kerberos security protocol, provides password policy enforcement with regard to complexity validation for strong passwords, provides support for account lockout, and supports password expiration. A connection made using Windows Authentication is sometimes called a trusted connection, because SQL Server trusts the credentials provided by Windows.
Connecting Through SQL Server Authentication
When using SQL Server Authentication, logins are created in SQL Server that are not based on Windows user accounts. Both the user name and the password are created by using SQL Server and stored in SQL Server. Users connecting using SQL Server Authentication must provide their credentials (login and password) every time that they connect. When using SQL Server Authentication, you must set strong passwords for all SQL Server accounts.
More Reference URL: http://msdn.microsoft.com/en-us/library/ms144284%28v=sql.110%29.aspx
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