What is a directory service?

Together, directory services and IAM allow organizations to control user accounts, authentication, access control, permissions and other crucial aspects of network security.

With the rise of the internet, cloud computing and remote work, directory services have become crucial to the way organizations leverage distributed computing architectures to enhance core business processes. Directory services act like a phonebook for network resources, storing information about users, devices and other resources so they can connect quickly and securely.

Unlike traditional relational databases that organize information in rows and columns, directory services are designed hierarchically. Using namespaces, a method of classifying network resources so they are easily identifiable, directory services’ hierarchical structure allows millions of users and devices to exchange information over a network.

Directory services are designed around a client/server model, a standard network setup where one program is the “client” and the other is the “server.” In a directory services database, the client is typically a user, device or application.

The client searches for a resource that is contained in the directory services database. Meanwhile, the database undertakes an authentication process to see whether it has the necessary permissions to access the resource—a process known as “authentication.”

The authentication process is at the core of directory services functionality because it establishes whether a user or device can access their requested resource. Authentication is conducted in three steps: credentialing, verification and permissions.

1. Credentialing: The user or device submits their credentials for accessing the requested resource. Common examples of credentials include usernames, passwords and biometric data that can be used to establish a user’s identity.
2. Verification: The directory server uses relies on several common protocols to verify the user is who or what they claim to be. Once a user’s identity has been established, the directory server provides an authentication ticket or token that can be presented to other applications the user encounters.
3. Permissions: After a user’s identity and credentials are verified, the directory services database checks the provided information against its internal access control lists (ACLs) to determine which resources they can access.

In addition to the authentication process, directory servers might also rely on other common protocols to confirm a user’s identity and establish which resources they can access:

• Lightweight Directory Access Protocol (LDAP): The foundational protocol that governs directory data, LDAP allows applications to query directory services databases and manage user identities over Transmission Control Protocol/Internet Protocol (TCP/IP) networks like the internet.

• Kerberos: Kerberos is a ticket-based authentication protocol that issues time-limited tickets or tokens. Applications can reuse these tickets and tokens in order to verify a user’s identity rather than requiring them to reenter a password. Kerberos is widely used by some of the largest directory services and cloud providers in the world, including Microsoft Active Directory (Azure Active Directory), Red Hat® Enterprise Linux®, AWS, Google Cloud and macOS.

• Security Assertion Markup Language (SAML): SAML is an XML-based protocol that enables single sign-on (SSO), an authentication system that allows users to log in to multiple applications with one set of credentials.

• Domain Name System (DNS): The Domain Name System (DNS) is a protocol that converts human-friendly domain names like google.com and facebook.com into Internet Protocol (IP) addresses computers need to identify each other on a network. DNS is often infused into directory services to match human-readable names with network resources so they can be more easily identified.  

Several key components are critical to directory services functionality, enabling authorized users, devices and applications to access directory information. Here’s a closer look at each component.

• Directory server: The directory server is a physical or virtual server that stores data so it can be accessed and managed in a directory service. Directory servers rely on common protocols like LDAP, LDAPS and DNS to manage information about network resources in a hierarchical structure that’s easily accessible for authorized users, devices and applications.

• Directory clients: A directory client is an application that enables operations like user authentication and identity management to be performed on a directory server. Like directory servers, directory clients rely on common directory services protocols for their functionality.

• Directory Information Tree (DIT): The DIT is the hierarchical organization of information in a directory service. They are made up of individual entries that represent users, groups, applications and devices. A strong DIT structure enables directory data to be swiftly and securely accessed by authorized users, a core directory services functionality.

• Schema: Directory schemas are another way of defining information within a directory services database. While DIT is hierarchical, schemas define how individual directory objects are stored in a directory service and their unique properties, ensuring data is defined in a consistent manner across the entire database.

• Replication tools: Replication tools, also known as replication server instances, are software processes that enable directory information to be replicated. The replication of directory information provides several key capabilities of directory services, such as fault tolerance and disaster recovery (DR).

Modern enterprises depend on directory services for a wide range of capabilities. From enhancing security and compliance, to helping achieve high availability—here’s a look at the top enterprise benefits of directory services.

Instead of requiring users to authenticate multiple times as they move through different parts of a database, directory services focus on a different approach. They allow users to authenticate once and use a token or ticket to establish their identity going forward.

This approach reduces the necessity of creating and storing multiple passwords and allows the same authentication policies to be enforced across the entire database.

Directory services allow administrators to centralize and automate their approach to permissions and roles. For example, they can add a user or application to a group and automate the process of giving them access to the same resources as other users in that group.

This approach simplifies and streamlines administration tasks and reduces the likelihood of human error in manual processes.

Modern directory services are equipped with some of the strongest encryption tools available, ensuring that communication and resource sharing remain safe and reducing the likelihood of a data breach.

Also, many common protocols that directory services rely upon (for example, TLS, SSL, MFA and SAML) already comply with the most rigorous standards for data security, such as HIPAA and SOC 2.

Directory services are designed to process millions of authentication requests at the same time without affecting their performance, making them highly available systems.

By widely distributing replicas of directory data that users are accessing, they can consistently avoid downtime even while managing heavier-than-usual workloads.

Directory services can be easily integrated into on-premises and cloud-based environments, leveraging both physical and virtual resources and blending them seamlessly.

Application programming interfaces (APIs) help teams easily integrate directory services with common systems like HR databases, customer relationship management (CRM) systems and widely used web applications.

Like other modern, complex distributed systems, directory services are struggling to cope with the massive increase in network data brought about by new technologies like artificial intelligence (AI) and the Internet of Things (IoT).

With more applications, users and devices accessing and sharing information than in the past, even the most sophisticated directory services face new challenges.

Maintaining data consistency (that is, the state of data in which all copies or instances remain the same) has always been a challenge in directory services.

As databases become larger and more complex to meet the needs of new technologies, keeping data replicas up to date is harder and can affect system performance.  

Providing uninterrupted access to directory services for all the various users and applications that need support it is a complex and resource-intensive task.

Fault tolerance—the ability to remain operational even when components and systems fail—requires strong procedural testing and redundancies or systems are going to fail, resulting in downtime.

Directory services are attractive targets for bad actors and cyberthreats because they contain valuable information that’s critical to the core business processes of the organizations they support.

Attackers deploy a wide range of targeted attacks—including ransomware and identity theft—to gain unauthorized access to directory data and use it to harm an enterprise.

Directory services are widely used at the enterprise level and support a large range of use cases. Here are some of the most popular.

Directory services support identity and access management (IAM) through seamless authentication processes (for example, single sign-on (SSO)), automated compliance capabilities and a centralized approach to managing digital identities. IAM is a cybersecurity process that ensures teams can use cloud applications to collaborate efficiently and securely.

According to a recent report, the global IAM market size was worth almost USD 18 billion in 2023. Furthermore, it was projected to grow over USD 61 billion by the year 2032, resulting in a compound annual growth rate (CAGR) of 15.3%.¹

Multi-factor authentication (MFA) is a method of verifying a user’s identity through multiple forms of proof, such as passwords and biometric information.

Directory services use MFA to give organizations extra layers of protection when users are working remotely on multiple devices, such as personal computers, tablets and smartphones. Directory-based MFA helps protect sensitive workloads and information from bad actors and ensures compliance with directory policies.

Directory services allow organizations to configure open source compute environments—compute ecosystems where the underlying software is free and available for anyone to use and build upon.

For example, OpenLDAP is an open source directory server and FreeIPA is an open source IAM tool. Both enable open source directory services for organizations that run Linux, the world’s most popular open source operating system (OS).

Most modern enterprises are leveraging the cloud as part of their digital transformation journey, an ongoing effort to integrate digital technology into every area of their organization. Directory services support both hybrid cloud and multicloud environments, IT architectures that combine different types of cloud resources to optimize IT infrastructure.

For example, advanced directory services solutions can secure both private and public cloud instances to enable fast, consistent authentication for users and applications.

Directory services help enterprises optimize critical network resources like user groups, printers and file servers through integration with DNS and other network systems.

IT managers rely on directory services to configure and deploy resources on a network with minimal effort, regardless of complexity and number of users. Directory services provide a centralized hub for managing network resources, simplifying administration and giving users instant access to the resources they need through SSO and other forms of authentication.

The rise of AI—especially generative AI (gen AI)—is not only helping to automate processes that previously required manual input, but also fundamentally changing aspects of directory services. For example, in hybrid cloud architectures alone, the IBM Institute of Business Value (IBV) reports that 68% of users have already formalized a policy or approach for generative AI use.

Previously considered static databases, modern directory services with AI-powered capabilities are becoming smarter, more adaptive and even autonomous. Here are three examples of AI-powered capabilities that are transforming directory services.