Cloud computing is a new boom to the IT industry and provides resources to the user as a service over the internet. Cloud computing provides three types of services to the user, SaaS, PaaS and IaaS. It has a unique feature “Anytime and anywhere” which made it a latest technology. Cloud environment is shared by clients and they do not want the data to leak from one domain to another. Virtual machine attacks are at a higher risk. Intrusion Detection Systems (IDSs) can be used to monitor system activities for malicious activity. Given the distributed architecture for cloud computing, conventional IDS like host based or network based alone are not suitable, so a multilayer IDS at the cloud provider’s site that takes a hybrid approach to suit cloud computing has been designed and implemented.