If anonymous access is not set up, a client must authenticate to Directory Server to access the directory contents. With simple password authentication, a client authenticates to the server by providing a simple, reusable password.
The client authenticates to Directory Server through a bind operation in which the client provides a distinguished name and credentials. The server locates the entry that corresponds to the client DN, then checks whether the client's password matches the value stored with the entry. If the password matches, the server authenticates the client. If the password does not match, the authentication operation fails and the client receives an error message.
The drawback of simple password authentication is that the password is transmitted in clear text, which can compromise security. If a rogue user is listening, that user can impersonate an authorized user.
Simple password authentication offers an easy way of authenticating users. However, you need to restrict the use of simple password authentication to your organization’s intranet. This kind of authentication does not offer the level of security that is required for transmissions between business partners over an extranet or for transmissions with customers on the Internet.