The National Institute of Standards and Technology (NIST) defined cloud computing as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or cloud provider interaction. Cloud Computing refers to the following concepts of Grid Computing, Utility Computing, software as a service, storage in the cloud and virtualization. These are termed as a client using a provider’s service remotely, known as cloud. Cloud computing has the potential to change how organizations manage information technology and transform the economics of hardware and software at the same time. Cloud computing promised to bring a new set of entrepreneurs who could start their venture with zero investment on IT infrastructure. A principal goal of this paper is to identify privacy and security issues in the distributed environment and concern to cloud computing participants and users .