NT Lan Manager, NTLM, is a Microsoft suite of security protocols providing authentication, integrity and confidentiality. NTLM was developed as a replacement for LANMAN and is backward compatible with the latter. Nowadays usage of NTLM is discouraged, since the techniques used to provide security do not comply with current security standards; while Kerberos has replaced NTLM in Active Directory-related security protocols, NTLM is still used in anumber of situations.
Those include situations when client doesn’t support kerberos; when domain controller is not available; when user is authenticated over Web. In general, using NTLM means security risk (related to credentials leak) and thus should be watched and phased out wherever possible.