In the last few years cloud computing has created much hype in the IT world. It has provided new strategies to cut down costs and provide better utilization of resources. Apart from all drawbacks, the cloud infrastructure has been long discussed for its vulnerabilities and security issues. There is a long list of service providers and clients, who have implemented different service structures using cloud infrastructure. Despite of all these efforts many organizations especially with higher security concerns have doubts about the data privacy or theft protection in cloud. This thesis aims to encourage Swedish Armed Forces (SWAF) networks to move to cloud infrastructures as this is the technology that will make a huge difference and revolutionize the service delivery models in the IT world. Organizations avoiding it would lag behind but at the same time organizations should consider to adapt a cloud strategy most reliable and compatible with their requirements. This document provides an insight on different technologies and tools implemented specifically for monitoring and security in cloud. Much emphasize is given on virtualization technology because cloud computing highly relies on it. Amazon EC2 cloud is analyzed from security point of view. An intensive survey has also been conducted to understand the market trends and people’s perception about cloud implementation, security threats, cost savings and reliability of different services provided.