Many software applications have directory service functionality built into their applications. These narrowly targeted directory services most often lack standards-based interfaces, resulting in one network containing multiple directories that don't work together and have to be maintained separately. These disparate directory services often translate into a higher total cost of ownership, requiring greater management and more complex applications.
Microsoft Windows 2000 Server Active Directory® service is an enterprise-class directory service that is scalable, built using Internet-standard technologies and delivered with Microsoft Windows 2000 Server. It is the consolidation point for isolating, migrating, centrally managing and reducing the number of directories found in a network. Using it can simplify management, strengthen security and increase interoperability.
While not every organization will immediately implement Active Directory services when deploying Windows 2000 Server, the solution does offer many advantages, including:

Manageability:
It allows your organization to efficiently share and manage information about network resources or users.

• It provides a single point of management for Windows 2000 Server user accounts, clients, servers and applications.
• It can contain over one million objects of a business such as users, computers, printers and application programs.

Security:
It acts as the central authority for network security, letting your operating system verify a user's identity and control access one work resources.

• It can be used to extend systems securely to the Internet.

Interoperability:
It helps to organize and integrate systems that aren't Windows-based and consolidates directories for easier management of the entire network.

• It increases the value of your existing network and lowers the overall cost of computing because it makes your current Windows network more manageable, secure and interoperable.