The shift to Cloud computing has brought with it its specific security challenges concerning the loss of control, trust and multi-tenancy especially in Infrastructure-as-a-Service (IaaS) Cloud model. This article focuses on the design and development of an intrusion detection system (IDS) that can handle security challenges in IaaS Cloud model using an open source IDS. We have implemented a proof-of-concept prototype on the most deployed hypervisor—VMware ESXi—and performed various real-world cyber-attacks, such as port scanning and denial of service (DoS) attacks to validate the practicality and effectiveness of our proposed IDS architecture. Based on our experimental results we found that our Security Onion-based IDS can provide the required protection in a reasonable and effective manner.