With the expansion of national markets beyond geographical limits, success of any business often depends on using software for competitive advantage. Furthermore, as technological boundaries are expanding, projects distributed across different geographical locations have become a norm for the software solution providers. Nevertheless, when implementing Global Software Development (GSD), organizations continue to face challenges in adhering to the development life cycle. The advent of the internet has supported GSD by bringing new concepts and opportunities resulting in benefits such as scalability, flexibility, independence, reduced cost, resource pools, and usage tracking. It has also caused the emergence of new challenges in the way software is being delivered to stakeholders. Application software and data on the cloud is accessed through services which follow SOA (Service Oriented Architecture) principles. In this paper, we present the challenges encountered in globally dispersed software projects. Based on goals mutually shared between GSD and the cloud computing paradigm, we propose to exploit cloud computing characteristics and privileges both as a product and as a process to improve GSD. © 2011 IEEE.