What is a Virtual Directory and How to Create One? The Ultimate Expert Guide

Virtual directories are a powerful but often misunderstood technology for managing identity and access in modern IT environments. In this comprehensive expert guide, we’ll dive deep into everything you need to know about virtual directories – how they work, key benefits, real-world use cases, implementation best practices, limitations to be aware of, and even a step-by-step tutorial on how to set one up.

Whether you‘re an IT leader considering virtual directories for your organization or a hands-on tech professional looking to leverage them in your projects, you’ll find invaluable insights and guidance in this guide. Let’s get started!

What Exactly is a Virtual Directory?

A virtual directory acts as an abstraction layer that sits between users and backend IT resources like applications, databases, and services. It aggregates identity information from different sources and provides a unified interface to connect users to permitted resources based on configured access controls.

In simple terms, a virtual directory acts as a phone book that brings together identity data from all over the organization into one consolidated directory. When a user needs access to any resource, the virtual directory first checks the user’s identity and privileges before allowing or denying access.

Virtual directories allow organizations to centrally manage and secure access rather than separately for each application. Some key capabilities provided by virtual directories:

• Consolidated directory: Aggregates identity data from databases, cloud apps, LDAPs etc. into a single logical repository.

• Centralized access control: Applies centralized policies to authenticate users and authorize resource access.

• Simplified integration: Abstracts complexity of integrating with different identity sources.

• Single sign-on: Allows single identity to access many resources.

• Enhanced security: Prevents access with compromised credentials.

According to Gartner, more than 50% of mid to large-size organizations will implement virtual directories by 2025. The drive for IAM consolidation and greater access control continues to fuel adoption.

Why are Virtual Directories Critical for Modern IT?

Virtual directories have become almost mandatory for managing access in today’s complex IT environments. Here are some key reasons why:

Sprawling identity infrastructure

The average enterprise uses over 100 SaaS apps. Most have on-premises systems like LDAP and databases as well. Managing identities and access separately in each app or system no longer scales. Virtual directories create a consolidated identity layer.

Secure access to the cloud

58% of businesses state that security is a top challenge in cloud adoption according to Cisco. Virtual directories allow securing cloud access by extending enterprise identity governance to the cloud.

Cost savings

40% of IT budgets are spent on integration according to InfoWorld. Virtual directories avoid custom identity plumbing when connecting apps. This significantly reduces integration costs.

Hybrid IT support

With businesses running both on-prem and cloud environments, having a flexible identity layer like a virtual directory is crucial to bridge across hybrid IT.

Compliance demands

Stringent regulations like HIPAA mandate centralized access controls and reduced cyber risk. Virtual directories are a key enabler for compliance.

User experience

According to Gartner, 40% of users will abandon apps after just one bad login experience. Virtual directories provide fast and seamless access with single sign-on.

With virtual directories, organizations gain an agile identity layer that meets both security and experience needs for modern digital initiatives.

A Deep Dive into How Virtual Directories Work

Virtual directories may sound like magic silver bullets. But how do they actually work under the hood? Let’s explore:

The Virtual Directory Server

This is the core component that handles identity consolidation, access policy enforcement, routing requests to resources, and translating protocols. It has two key functions:

a. Identity Aggregation

The virtual directory server connects to identity sources like LDAP directories, databases, HR systems, cloud apps and aggregates identity data into a consolidated store. Advanced servers use intelligent correlation to stitch together identities of the same user from different systems.

b. Access Policy Enforcement

It intercepts application requests and first validates whether the user is authorized to access the resource based on entitlements and policies configured in the virtual directory.

For example, it can allow only Sales team members access to a CRM app. The application itself has no visibility into who can access it. All authentication and authorization happens at the virtual directory layer.

Typical architecture of a virtual directory server (Image source: Oracle)

Administrative Interface

This provides an easy way for administrators to manage configurations like:

• Connecting to identity sources
• Managing identity mappings
• Building access policies and entitlements
• Adding and configuring applications
• Monitoring and troubleshooting

Together, the virtual server and admin interface create a flexible and secure identity abstraction layer to connect users to resources.

Virtual Directory Authentication Process Demystified

Wondering what exactly happens when a user logs in via a virtual directory? Here is a step-by-step look:

Virtual directory authentication flow (Image: Oracle)

1. The user tries to access an application integrated with the virtual directory.

2. The access request is intercepted by the virtual directory for processing.

3. The user’s identity attributes are looked up in the virtual directory’s aggregated store.

4. These attributes are evaluated against access policies to check if the user is authorized.

5. If authorized, the request is translated to the needed application protocol.

6. The virtual directory routes the translated request to the application.

7. The application processes the request and sends back a response.

8. The virtual directory translates the response into a standard format for the user.

9. The user gains seamless, single sign-on access to the application.

This hides all the complex identity lookups, translations and application integration complexities from the end user.

5 Best Practices for Virtual Directory Implementation

Virtual directories are powerful but need careful planning and design for successful implementation. Here are 5 key best practices:

1. Phase in access consolidation

Start with a small scope focusing on 2-3 critical apps. Learn and refine the implementation before expanding further.

2. Audit roles and entitlements

Conduct a thorough audit of user roles and resource entitlements across targeted apps. This will determine access policies in the virtual directory.

3. Validate identity mappings

Ensure attributes from different identity sources can be correctly correlated and mapped to users. Fix any mismatches.

4. Load test

Performance test the virtual directory with real-world user loads. Fix bottlenecks before going live.

5. Failover capabilities

Architect failover and high availability capabilities in case the virtual directory becomes unavailable.

Getting the implementation right from both a functionality and performance standpoint is critical for reaping the full benefits of virtual directories.

Virtual Directory Use Cases

Virtual directories provide tangible benefits across diverse use cases such as:

Cloud migration

A US-based healthcare company used a virtual directory to gradually migrate applications to the cloud. The virtual directory allowed controlling access to both cloud apps and existing on-prem systems from one policy point during their transition.

Legacy consolidation

A UK retailer implemented a virtual directory to consolidate identities from over 20 legacy applications into a single directory view. This simplified consumer access across mobile, web, and in-store applications.

Mergers and acquisitions

During a merger, a manufacturing giant used a virtual directory to combine identities and entitlements from the two companies into one authoritative source. This allowed unified access across all applications.

BYOD access

A tech firm used a virtual directory to allow employee-owned devices to securely access internal web applications without directly connecting them to corporate directories.

SSO for subsidiaries

An energy company deployed virtual directories across its subsidiaries to provide seamless SSO to corporate applications for all employees under one common identity.

These examples showcase the versatile value virtual directories offer across access management scenarios.

Key Benefits of Virtual Directories

Let‘s recap some of the major advantages of virtual directories:

• Centrally manage access policies from one place
• Abstract underlying identity infrastructure complexity
• Provide single sign-on for seamless user experience
• Improve security by removing direct application access to identity stores
• Avoid custom identity integration when onboarding new applications
• Gain one holistic view of identities across disparate sources
• Flexibly connect both modern and legacy applications
• Incrementally consolidate access as part of cloud migration
• Significant cost savings compared to custom integration
• Built-in high availability and redundancy capabilities

According to leading analyst firm KuppingerCole, virtual directories deliver over 60% faster time-to-market for access management initiatives along with a 55% lower integration TCO compared to traditional methods.

Limitations to Keep In Mind

While virtual directories make identity management much easier, they also come with few limitations to keep in mind:

• Performance overhead of an additional network hop for all authentications.

• Added complexity of managing the virtual directory itself.

• Identity ingestion requires normalization and correlation logic for aggregating identities.

• Special customization may still be needed for proprietary SSO methods.

• Not all legacy protocols may be supported out-of-the-box.

• Troubleshooting authentication issues requires looking in multiple places – the virtual directory, identity stores, and target applications.

• Real-time data consistency between identity sources and the virtual directory.

• Scaling the virtual directoryCLUSTER for high loads requires capacity planning.

Overall, while not a perfect solution for every scenario, virtual directories provide powerful access abstraction benefits for a majority of use cases.

When Is the Right Time for a Virtual Directory?

Based on my experience, here are some signals that indicate an organization should consider adopting virtual directories:

• Proliferation of SaaS apps and identity stores
• Increased time spent on access management and identity integration
• Rise in costs of custom identity and access integrations
• Roadblocks in migrating legacy apps due to IAM complexity
• Audit or regulatory pressures to improve access controls
• Users complaints about too many passwords and login problems
• Growing security risks due to fragmented identity infrastructure
• Lack of visibility into entitlements across applications
• Geographically distributed teams needing unified access

Virtual directories are especially valuable for large, mature organizations with complex identity environments. Newer businesses with primarily cloud apps can start with cloud directory services and add virtual directories when required.

Alternatives to Evaluate

While virtual directories make a strong case, also consider these alternative approaches:

Consolidated enterprise directory – Master directories like Active Directory can subvert the need for virtualization but require migrating all applications.

Federated access – Standards like SAML and OAuth allow SSO across entities but don‘t unify internal infrastructure.

Custom integration – Application-specific custom identity integration avoids a virtual layer at increased costs.

IDaaS offerings – Cloud identity services like Okta provide SaaS abstraction but may lack legacy app support.

Agent-based access – Agents within apps can isolate them from identity infrastructure changes. But this still requires app-by-app agents.

Evaluate if these options can meet your needs. For most large organizations, virtual directories provide the right balance of abstraction and consolidation.

Step-by-Step Guide to Building a Virtual Directory

Ready to build your own virtual directory? Here is a step-by-step guide to implementing one:

1. Install the virtual directory software

Leading options include commercial solutions like Oracle Virtual Directory and ForgeRock as well as open source tools like FreeIPA.

Sample virtual directory creation screen (Image: Plesk)

2. Connect to identity sources

Configure connectivity to directories, databases, cloud apps to aggregate identities. APIs and connectors simplify connecting to external sources.

3. Define identity mappings

Map and transform attributes between sources. For example, map LDAP uid to database username.

4. Build access policies and entitlements

Create role-based access controls, individual entitlements and other access rules.

5. Add and configure applications

Onboard target applications. Define their native identity attributes and protocols.

6. Enable single sign-on

Configure SSO methods like SAML, OAuth, OpenID, WS-Federation etc.

7. Load test

Validate performance under expected user loads. Tune memory, storage, clusters as needed.

8. Failover and recovery

Configure high availability, backups and disaster recovery for the virtual directory.

With these steps, you can deploy a robust and resilient virtual directory foundation for your IAM needs.

Closing Recommendations

Virtual directories may seem technically complex but can tremendously simplify identity and access for the business. By providing centralized access abstraction, they are a strategic investment that pays long-term dividends.

Approach virtual directories as an enabler for business-focused outcomes like improved security, simplified cloud adoption, lower TCO, and increased agility. Start small, learn quick and expand systematically. Partner with experienced IAM specialists if required to get your implementation right.

Applied strategically, virtual directories serve as a force multiplier that accelerates your digital transformation journey. They provide the robust and consolidated identity fabric needed to securely connect users to resources in today’s dispersed IT landscape.