Will Local OS authentication work in a distributed environment?

In WebSphere Application Server Network Deployment with application server nodes distributed over more than one physical machine, you cannot use Local OS authentication. In this environment, you must use either LDAP or a custom registry. There is one exception though; a Windows domain registry is a centralized registry and can be used in this situation. Be aware that NIS, while technically a centralized registry, is not suitable for use with WebSphere Application Server Network Deployment.

More information can be found in the Information Center article: Local operating system registries.