Why is MS SQL Server Using NTLM Authentication?

Solution 1:

It's because I was connecting to the SQL Server locally, from the same server that hosted SQL Server. When I connect from another machine on the network, the authentication mechanism used is Kerberos, as expected.

SQL Server will always use NTLM if connecting locally. Kerberos is only used if connecting remotely.

This post from the SQL Server Protocols Blog, while dated, says the same thing:

1) Kerberos is used when making remote connection over TCP/IP if SPN presents.

2) Kerberos is used when making local tcp connection on XP if SPN presents.

3) NTLM is used when making local connection on WIN 2K3.

4) NTLM is used over NP connection.

5) NTLM is used over TCP connection if not found SPN.