This paper discusses setting up a private cloud infrastructure using open-source technologies Eucalyptus and Xen, highlighting their capabilities in creating virtual machine instances. The authors emphasize the cost-effectiveness and flexibility of using these tools for cloud computing in academic and IT settings, and provide a detailed guide for the installation process on Ubuntu 10.04. The proposed system architecture and component configurations aim to provide both Infrastructure as a Service (IaaS) and Software as a Service (SaaS).