Just like in AX2009, the primary authentication method for users to access Dynamics AX is provided through Active Directory. This allows users to be setup to access Dynamics AX and allows administration of users name and password policies to be handled by the network administrator. With Dynamics AX 2012, it also provides flexible authentication mechanism through the use of Active Directory Federations Services, Forms-based authentication or Windows Live options. Active Directory Federation Services (ADFS) is a feature of Windows Server that allows two companies that have close collaboration to allow their network domains to trust each other. This is commonly used for example where a business function might be outsourced and so the outsourced company users would be authenticated through ADFS to access Dynamics AX. This could also be used in scenarios where vendors log on Dynamics AX to manage inventory on your behalf. Windows Live is a common internet based authentication mechanism. This would be used where you have a large range of customers, vendors or external consultants that needs to access Dynamics AX for account management activities. Forms-based authentication validates credentials that are entered in a logon form.