WCF client endpoint: SecurityNegotiationException without <dns>

Question

I'm having a strange situation here. I got it working, but I don't understand why. Situation is as follows:

There is a WCF service which my application (a website) has to call. The WCF service exposes a netTcpBinding and requires Transport Security (Windows). Client and server are in the same domain, but on different servers.
So generating a client results in the following config (mostly defaults)

<system.serviceModel>
    <bindings>
      <netTcpBinding>
         <binding name="MyTcpEndpoint" ...>          
              <reliableSession ordered="true" inactivityTimeout="00:10:00"
                              enabled="false" />
             <security mode="Transport">
                <transport clientCredentialType="Windows" protectionLevel="EncryptAndSign"/>
                <message clientCredentialType="Windows" />
            </security>
        </binding>
      </netTcpBinding>
    </bindings>
    <client> 
        <endpoint address="net.tcp://localhost:xxxxx/xxxx/xxx/1.0" 
                   binding="netTcpBinding" bindingConfiguration="MyTcpEndpoint" 
                   contract="Service.IMyService" name="TcpEndpoint"/>
    </client>
</system.serviceModel>

When I run the website and make the call to the service, I get the following error:

System.ServiceModel.Security.SecurityNegotiationException: Either the target name is incorrect or the server has rejected the client credentials. ---> System.Security.Authentication.InvalidCredentialException: Either the target name is incorrect or the server has rejected the client credentials. ---> System.ComponentModel.Win32Exception: The logon attempt failed
    --- End of inner exception stack trace ---
    at System.Net.Security.NegoState.EndProcessAuthentication(IAsyncResult result)
    at System.Net.Security.NegotiateStream.EndAuthenticateAsClient(IAsyncResult asyncResult)
    at System.ServiceModel.Channels.WindowsStreamSecurityUpgradeProvider.WindowsStreamSecurityUpgradeInitiator.InitiateUpgradeAsyncResult.OnCompleteAuthenticateAsClient(IAsyncResult result)
    at System.ServiceModel.Channels.StreamSecurityUpgradeInitiatorAsyncResult.CompleteAuthenticateAsClient(IAsyncResult result)
    --- End of inner exception stack trace ---

Server stack trace: 
    at System.ServiceModel.AsyncResult.End[TAsyncResult](IAsyncResult result)
    at System.ServiceModel.Channels.ServiceChannel.SendAsyncResult.End(SendAsyncResult result)
    at System.ServiceModel.Channels.ServiceChannel.EndCall(String action, Object[] outs, IAsyncResult result)
....

Now, if I just alter the configuration of the client like so:

    <endpoint address="net.tcp://localhost:xxxxx/xxxx/xxx/1.0" 
               binding="netTcpBinding" bindingConfiguration="MyTcpEndpoint" 
               contract="Service.IMyService" name="TcpEndpoint">
        <identity>
            <dns />
        </identity> 
  </endpoint>

everything works and my server happily reports that it got called by the service account which hosts the AppPool for my website. All good.

My question now is: why does this work? What does this do? I got to this solution by mere trial-and-error. To me it seems that all the <dns /> tag does is tell the client to use the default DNS for authentication, but doesn't it do that anyway?

UPDATE
So after some more research and trial-and-error, I still haven't found an answer to this problem. In some cases, if I don't provide the <dns />, I get the Credentials rejected error, but if I provide the <dns value="whatever"/>config, it works. Why?

Answer 1

<dns/> tag allows the client to verify the server identity. For example if you said <dns value="google.com"/> it would verify that the WCF server provides google.com identity. Since you say <dns/> it probably just allows everybody to serve you.

More info at Service Identity and Authentication