The cloud computing technology has recently gain allot of attention both in publicand private sectors. The technology is expected to grow up dramatically in the next3-5 years. The deployment of next generation clouds has increased in public andprivate sectors. There are plenty of those who want to deploy a cloud locally, in theirdatacenters. Cost, less space in datacenters, increase in utility bills, management andefforts to prepare system for cloud are well-known hurdles stopping to deploy a cloudlocally.Deploying a cloud in a virtual environment can play an important role to overcomethese hurdles. Ubuntu cloud infrastructure is an easy, simple and fast approachto deploy a next generation open source cloud in a real environment. This thesis findsthe challenges and issues while considering such an approach in a virtual environment.It also finds the possible reason(s) of occurrence, possible solution(s) to thefound challenges and issues and implements the found solutions.To make an easy cloud deployment, this thesis helps to prepare a fully automatedvirtual environment for deploying cloud. And also makes automation possible in acertain context. Most of the solution has also been automated into the scripts.