Software-Defined Networking (SDN) is a network architecture that differs from traditionalnetwork planes. SDN has tree layers: infrastructure, controller, and application. Thegoal of SDN is to simplify management of larger networks by centralizing control into thecontroller layer instead of having it in the infrastructure. Given the known advantages ofSDN networks, and the flexibility of cloud computing. We are interested if this combinationof SDN and cloud services affects network performance, and what affect the cloud providersphysical location have on the network performance. These points are important whenSDN becomes more popular in enterprise networks. This seems like a logical next step inSDN, centralizing branch networks into one cloud-based SDN controller. These questionswere created with a literature studies and answered with an experimentation method. Theexperiments consist of two network topologies both locally hosted SDN (baseline) and cloudhosted SDN. The topology used Zodiac FX switches and Linux hosts. The following metricswas measured: throughput, latency, jitter, packet loss, and time to add new hosts. Theconclusion is that SDN as a cloud service is possible and does not significantly affect networkperformance. One limitation with this thesis was the hardware, resulting in big fluctuationin throughput and packet loss.