Nowadays, cloud computing has become the center of attention in the IT world. It provides powerful computing services to individuals and organizations via the Internet, and enables them to access a pool of shared resources such as storage servers and applications. Businesses of all sizes are adopting cloud computing at an increasing rate as it provides them with great benefits like cost efficiency, since they do not actually have to buy the hardware and software resources, but simply pay per use. The cloud architecture consists of different levels in which each level gives the user additional control. Furthermore, a good operating system is crucial, and traditional operating systems cannot attain all the requirements of the cloud. For this reason, special operating systems need to be designed that can handle the demands of the cloud. This paper will discuss the cloud architecture and operating system.