SQL Server supports two authentication modes, Windows authentication mode and mixed mode.
Windows authentication is the default, and is often referred to as integrated security because the SQL Server security model is tightly integrated with Windows. User and Group accounts are trusted to log into SQL Server. Windows users who have already been authenticated do not need to re-enter their login credentials.
Mixed mode supports authentication by both Windows and SQL Server. User name and passwords are maintained within SQL Server.
Microsoft recommend using Windows authentication as this is more secure but the application can use either mode.