In the first half of April, two vendors of virtual directory products have announced new major version of their software. Identyx, based in Austin, Texas, announced the availability of version 2 of the Penrose Virtual Directory. Symlabs, based in Lisbon, Portugal, announced version 4 of the Symlabs Virtual Directory Server and the Symlabs LDAP Proxy Server.

Identyx now offers a NIS (Sun's Network Information Service, formerly known as "yellow pages") to LDAP bridge that will facilitate an organisation’s move from NIS to LDAP directory services. According to Jim Yang, some organisations are still using NIS, and this new functionality allows an easier migration path by establishing an LDAP interface to NIS information. Additionally, Penrose 2 adds support for dynamically deploying functionality modules, called "DAR" (Directory Application Archive) - similar to the "Web Application Archive" (WAR format) used by most Java application servers.

Symlabs has announced remote administration and major performance improvements in Version 4.0 with regards to newer multi-core CPU systems, as well as a general overhaul of the administration GUI and documentation, and a consolidation of functionality modules. Symlabs has traditionally positioned itself as the leader in terms of performance and has referenced several very large installations within the telecommunications and service provider industries where its virtual directory has performed very well. By making adjustments in order to better harness newer CPU technologies, such as Sun's T1 and T2 processors that offer many internal threads, this allows Symlabs clients to make fully utilise new advances in these technologies by scaling properly to those architectures.

However relevant these improvements may be to current and future customers of virtual directory software, Kuppinger Cole is of the opinion that there is nothing groundbreaking in these new versions, but rather an attempt by the respective vendors to better position themselves in the lucrative "simple identity integration" market segment for virtual directories and LDAP proxies. Within this lower-end market segment, organisations are increasingly looking to solve simple, but important challenges through the use of LDAP proxying and virtualisation techniques. The joining of multiple directory trees from multiple servers as well as mapping of data are commonly required features by enterprises looking towards integrating identity data and offering more identity-consuming services. This market segment is becoming increasingly competitive by the entry of new vendors, such as Optimal IDM who announced the first version of their virtual directory server last month. However, Kuppinger Cole believes that it is currently the most active segment, with the majority of virtual directory buyers falling into this segment.

The market segment for virtual directories that tend to go more towards the high end of complex identity integrations see complexity rising, and virtual directory vendors will have to extend their technology to offer features such as synchronisation, identity correlation and extended data abstraction functionality which is currently addressed by Radiant Logic's "Radiant One" VDS product, to be able to compete in this space as well. This latter market segment is not as well developed as the former, simpler "simple identity integration" segment, but is expected to grow throughout the year, and especially in 2009 as companies rethink and consolidate identity management as a service.