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The increasing popularity of computing clouds continues to drive both industry and research to provide answers to a large variety of new and challenging questions. We aim to answer some of these questions by evaluating performance and scalability when an n-tier application is migrated from a traditional datacenter environment to an IaaS cloud. We used a representative n-tier macro-benchmark (RUBBoS) and compared its performance and scalability in three different test beds: Amazon EC2, Open Cirrus (an open scientific research cloud), and Emulab (academic research test bed). Interestingly, we found that the best-performing configuration in Emulab can become the worst-performing configuration in EC2. Subsequently, we identified the bottleneck components, high context switch overhead and network driver processing overhead, to be at the system level. These overhead problems were confirmed at a finer granularity through micro-benchmark experiments that measure component performance directly. We describe concrete alternative approaches as practical solutions for resolving these problems.