Due to explosive growth of users, increasing energy demand and also the need to improve efficiency and maintain the stability of the electricity grid, smart grid is the only option available to electrical industry engineers. In fact, the smart grid is a physical-cyber system that provides coherent and integrated communication, processing and control functions. The smart grid provides control and management of millions of devices in the electricity industry in a reliable, scalable, cost-effective, real time and two-sided manner. Given the increasing growth of cyber threats in the last decade, the need to protect the electricity industry and its critical systems seems essential. The slightest disruption to the power industry's systems results in disruption to other industries, reduced productivity, and discontent. Hence we proposed an efficient cloud based architecture to improve smart grid performance. Proposed architecture provides data security and privacy against different types of cyber threats such as replay attack, modification attack and so on.