Cloud computing is a model for enabling ubiquitous, on-demand access to a shared pool of configurable computing resources which can be rapidly provisioned and released with minimal management effort. In cloud environment, resources are offered to the users in the form of virtual machines for hosting various types of application. These applications may be small application where entire component of application reside in a single virtual machine or composite application consisting of number of components, where each component reside in different virtual machine and communicate with each other. The virtual machines belonging to the same application have to communicate efficiently for better application performance. There is a need for a mechanism that increases the application performance and server utilization. This paper presents a communication aware placement of virtual machines for multi-tier web applications. The experiment is conducted using suitable number of Xen Cloud Platform enabled servers. The results shows improvements in performance.