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This paper proposes a Dynamic resource allocation method for Cloud computing. Cloud computing is a model for delivering information technology services in which resources are retrieved from the internet through web-based tools and applications, rather than a direct connection to a server. Users can set up and boot the required resources and they have to pay only for the required resources. Thus, in the future providing a mechanism for efficient resource management and assignment will be an important objective of Cloud computing. In this project we propose a method, dynamic scheduling and consolidation mechanism that allocate resources based on the load of Virtual Machines (VMs) on Infrastructure as a service (IaaS). This method enables users to dynamically add and/or delete one or more instances on the basis of the load and the conditions specified by the user. Our objective is to develop an effective load balancing algorithm using Virtual Machine Monitoring to maximize or minimize different performance parameters(throughput for example) for the Clouds of different sizes (virtual topology depending on the application requirement).

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