Educational institutions throughout the World have become highly dependent on information technology for their teaching-learning, service delivery and business requirements. The term cloud computing is completely new trend and technology which is known as third party revolution after computer and internet, in distributed computing, parallel computing, grid computing and in the case of distributed database improves the power of digital library. Cloud computing is making it possible to separate the process of building an infrastructure for service provisioning from the library of providing end user services. Cloud computing provides people the way to share distributed resources and services that belong to different organizations or sites. Cloud computing share distributed resources via the network in the open environment. The digital libraries have to face with some technique and service problems along with many advantages relative to the traditional libraries, and all these produce the practical needs of cloud computing. Cloud computing has influenced information resources, information users, information personnel and information facilities of digital libraries with its unique advantages and then promoted the development of digital libraries. Developed country like Ethiopia Libraries may soon be building and managing their own data centers. Different models show that libraries maintain more control over the applications and data stores that contain sensitive, private information about patrons. Provisioning and maintenance of infrastructure for Web based digital library present several challenges. In this paper we discuss problems faced with digital library and development efforts to overcome that problem. Infrastructure virtualization and cloud computing are particularly attractive choices which is challenged by both growth in the size of the indexed document collection, new features and most prominently usage. With the overview of Cloud Computing to university library, services of libraries will have a new leap in the near future. Services provided by libraries will become more user centric, more professional and more effective, etc. And we all believe that libraries will create more knowledge benefits for Ethiopia with the help of Cloud Computing.