diff --git a/tools/systemvm/debian/config/etc/default/cloud b/tools/systemvm/debian/config/etc/default/cloud
new file mode 100644
index 00000000000..6da9d9466df
--- /dev/null
+++ b/tools/systemvm/debian/config/etc/default/cloud
@@ -0,0 +1,2 @@
+#set ENABLED to 1 if you want the init script to start the password server
+ENABLED=0
diff --git a/tools/systemvm/debian/config/etc/default/cloud-passwd-srvr b/tools/systemvm/debian/config/etc/default/cloud-passwd-srvr
new file mode 100644
index 00000000000..6da9d9466df
--- /dev/null
+++ b/tools/systemvm/debian/config/etc/default/cloud-passwd-srvr
@@ -0,0 +1,2 @@
+#set ENABLED to 1 if you want the init script to start the password server
+ENABLED=0
diff --git a/tools/systemvm/debian/config/etc/init.d/cloud b/tools/systemvm/debian/config/etc/init.d/cloud
index 09d189a6a0a..c437f77350f 100755
--- a/tools/systemvm/debian/config/etc/init.d/cloud
+++ b/tools/systemvm/debian/config/etc/init.d/cloud
@@ -1,4 +1,4 @@
-#!/bin/bash -e
+#!/bin/bash 
 ### BEGIN INIT INFO
 # Provides:          cloud
 # Required-Start:    mountkernfs $local_fs cloud-early-config
@@ -12,12 +12,16 @@
 
 #set -x
 
+ENABLED=0
+[ -e /etc/default/cloud ] && . /etc/default/cloud
+
 if [ -f /mnt/cmdline ]
 then
     CMDLINE=$(cat /mnt/cmdline)
 else
     CMDLINE=$(cat /proc/cmdline)
 fi
+
 TYPE="router"
 for i in $CMDLINE
   do
@@ -111,6 +115,8 @@ status() {
   return 0
 }
 
+[ "$ENABLED" != 0 ] || exit 0 
+
 case "$1" in
    start) start
 	  ;;
diff --git a/tools/systemvm/debian/config/etc/init.d/cloud-early-config b/tools/systemvm/debian/config/etc/init.d/cloud-early-config
index ff283804151..c90297821b9 100755
--- a/tools/systemvm/debian/config/etc/init.d/cloud-early-config
+++ b/tools/systemvm/debian/config/etc/init.d/cloud-early-config
@@ -1,4 +1,4 @@
-#!/bin/bash -e
+#!/bin/bash 
 ### BEGIN INIT INFO
 # Provides:          cloud-early-config
 # Required-Start:    mountkernfs $local_fs
@@ -58,6 +58,7 @@ patch() {
   if [ -f /mnt/cmdline ]; then
     cat /mnt/cmdline > /var/cache/cloud/cmdline
   fi
+  return 0
 }
 
 setup_interface() {
@@ -80,8 +81,11 @@ setup_interface() {
   if [ "$ip" != "0.0.0.0" -a "$ip" != "" ]
   then
      echo "iface  $intf inet $bootproto" >> /etc/network/interfaces
-     echo "  address $ip " >> /etc/network/interfaces
-     echo "  netmask $mask" >> /etc/network/interfaces
+     if [ "$bootproto" == "static" ]
+     then
+       echo "  address $ip " >> /etc/network/interfaces
+       echo "  netmask $mask" >> /etc/network/interfaces
+     fi
   fi
 
   ifdown $intf
@@ -89,7 +93,7 @@ setup_interface() {
 }
 
 enable_fwding() {
-  echo "enable_fwding = $1"
+  logger -t cloud "enable_fwding = $1"
   echo "$1" > /proc/sys/net/ipv4/ip_forward
 }
 
@@ -97,6 +101,7 @@ enable_svc() {
   local svc=$1
   local enabled=$2
 
+  logger -t cloud "Enable service ${svc} = $enabled"
   local cfg=/etc/default/${svc}
   sed  -i "s/ENABLED=.*$/ENABLED=$enabled/" $cfg 
 }
@@ -137,34 +142,7 @@ setup_common() {
   ip route add default via $GW
 }
 
-setup_router() {
-  setup_common eth0 eth1 eth2
-  [ -z $DHCP_RANGE ] && DHCP_RANGE=$ETH0_IP
-  if [ -n "$DOMAIN" ]
-  then
-    #send domain name to dhcp clients
-    sed -i s/[#]*dhcp-option=15.*$/dhcp-option=15,\"$DOMAIN\"/ /etc/dnsmasq.conf
-    #DNS server will append $DOMAIN to local queries
-    sed -r -i s/^[#]?domain=.*$/domain=$DOMAIN/ /etc/dnsmasq.conf
-    #answer all local domain queries
-    sed  -i -e "s/^[#]*local=.*$/local=\/$DOMAIN\//" /etc/dnsmasq.conf
-  fi
-  sed -i -e "s/^dhcp-range=.*$/dhcp-range=$DHCP_RANGE,static/" /etc/dnsmasq.conf
-  sed -i -e "s/^[#]*listen-address=.*$/listen-address=$ETH0_IP/" /etc/dnsmasq.conf
-  sed -i  /gateway/d /etc/hosts
-  echo "$ETH0_IP $NAME" >> /etc/hosts
-  [ -f /etc/httpd/conf/httpd.conf ] && sed -i -e "s/^Listen.*$/Listen $ETH0_IP:80/" /etc/httpd/conf/httpd.conf
-  [ -f /etc/httpd/conf.d/ssl.conf ] && mv /etc/httpd/conf.d/ssl.conf /etc/httpd/conf.d/ssl.conf.bak
-  [ -f /etc/ssh/sshd_config ] && sed -i -e "s/^[#]*ListenAddress.*$/ListenAddress $ETH1_IP/" /etc/ssh/sshd_config
-  
-  enable_svc dnsmasq 1
-  enable_svc haproxy 1
-  enable_fwding 1
-  cp /etc/iptables/iptables-router /etc/iptables/rules
-}
-
-setup_dhcpsrvr() {
-  setup_common eth0 eth1
+setup_dnsmasq() {
   [ -z $DHCP_RANGE ] && DHCP_RANGE=$ETH0_IP
   [ -z $DOMAIN ] && DOMAIN="cloudnine.internal"
   if [ -n "$DOMAIN" ]
@@ -177,15 +155,44 @@ setup_dhcpsrvr() {
     sed  -i -e "s/^[#]*local=.*$/local=\/$DOMAIN\//" /etc/dnsmasq.conf
   fi
   sed -i -e "s/^dhcp-range=.*$/dhcp-range=$DHCP_RANGE,static/" /etc/dnsmasq.conf
-  sed -i -e "s/^[#]*dhcp-option=option:router.*$/dhcp-option=option:router,$GW/" /etc/dnsmasq.conf
-  #for now set up ourself as the dns server as well
-  #echo "dhcp-option=6,$NS1,$NS2" >> /etc/dnsmasq.conf
+  sed -i -e "s/^[#]*listen-address=.*$/listen-address=$ETH0_IP/" /etc/dnsmasq.conf
+
+}
+
+setup_sshd(){
+  [ -f /etc/ssh/sshd_config ] && sed -i -e "s/^[#]*ListenAddress.*$/ListenAddress $ETH1_IP/" /etc/ssh/sshd_config
+}
+
+setup_router() {
+  setup_common eth0 eth1 eth2
+  setup_dnsmasq
+
   sed -i  /gateway/d /etc/hosts
   echo "$ETH0_IP $NAME" >> /etc/hosts
-  [ -f /etc/httpd/conf/httpd.conf ] && sed -i -e "s/^Listen.*$/Listen $ETH0_IP:80/" /etc/httpd/conf/httpd.conf
-  [ -f /etc/httpd/conf.d/ssl.conf ] && mv /etc/httpd/conf.d/ssl.conf /etc/httpd/conf.d/ssl.conf.bak
 
+  setup_sshd 
+
+  enable_svc dnsmasq 1
+  enable_svc haproxy 1
+  enable_svc cloud-passwd-srvr 1
+  enable_svc cloud 0
+  enable_fwding 1
+  cp /etc/iptables/iptables-router /etc/iptables/rules
+}
+
+setup_dhcpsrvr() {
+  setup_common eth0 eth1
+  setup_dnsmasq
+
+  sed -i  /gateway/d /etc/hosts
+  echo "$ETH0_IP $NAME" >> /etc/hosts
+
+  setup_sshd 
+
+  enable_svc dnsmasq 1
   enable_svc haproxy 0
+  enable_svc cloud-passwd-srvr 1
+  enable_svc cloud 0
   enable_fwding 0
   cp /etc/iptables/iptables-router /etc/iptables/rules
 }
@@ -196,14 +203,13 @@ setup_secstorage() {
   public_ip=$ETH2_IP
   [ "$ETH2_IP" == "0.0.0.0" ] && public_ip=$ETH1_IP
   echo "$public_ip $NAME" >> /etc/hosts
-  [ -f /etc/httpd/conf/httpd.conf ] && sed -i -e "s/^Listen.*:80$/Listen $public_ip:80/" /etc/httpd/conf/httpd.conf
-  [ -f /etc/httpd/conf/httpd.conf ] && sed -i -e "s/^Listen.*:443$/Listen $public_ip:443/" /etc/httpd/conf/httpd.conf
 
-  sed 's/ENABLED=.*$/ENABLED=0/g' /etc/default/haproxy
   cp /etc/iptables/iptables-secstorage /etc/iptables/rules
   enable_fwding 0
   enable_svc haproxy 0
   enable_svc dnsmasq 0
+  enable_svc cloud-passwd-srvr 0
+  enable_svc cloud 1
 }
 
 setup_console_proxy() {
@@ -212,12 +218,23 @@ setup_console_proxy() {
   [ "$ETH2_IP" == "0.0.0.0" ] && public_ip=$ETH1_IP
   sed -i  /gateway/d /etc/hosts
   echo "$public_ip $NAME" >> /etc/hosts
-  sed 's/ENABLED=.*$/ENABLED=0/g' /etc/default/haproxy
   cp /etc/iptables/iptables-consoleproxy /etc/iptables/rules
+
   enable_fwding 0
   enable_svc haproxy 0
   enable_svc dnsmasq 0
-  chkconfig apache2 off
+  enable_svc cloud-passwd-srvr 0
+  enable_svc cloud 1
+}
+
+setup_default() {
+  cat > /etc/network/interfaces << EOF
+auto lo eth0
+iface lo inet loopback
+
+iface eth0 inet dhcp
+
+EOF
 }
 
 start() {
@@ -239,10 +256,15 @@ start() {
          [ "$NAME" == "" ] && NAME=consoleproxy
          setup_console_proxy;
 	  ;;
+     unknown)
+         [ "$NAME" == "" ] && NAME=systemvm
+         setup_default;
+          ;;
   esac
   return 0
 }
 
+disable_hvc
 if [ -f /mnt/cmdline ]
 then
     CMDLINE=$(cat /mnt/cmdline)
@@ -335,7 +357,7 @@ stop)
 force-reload|restart)
 
 	log_warning_msg "Running $0  is deprecated because it may not enable again some interfaces"
-	log_action_begin_msg "Reconfiguring network interfaces"
+	log_action_begin_msg "Executing cloud-early-config"
 	if start; then
 	    log_action_end_msg $?
 	else
diff --git a/tools/systemvm/debian/config/etc/init.d/cloud-passwd-srvr b/tools/systemvm/debian/config/etc/init.d/cloud-passwd-srvr
index 52715938ec4..f990e232a41 100755
--- a/tools/systemvm/debian/config/etc/init.d/cloud-passwd-srvr
+++ b/tools/systemvm/debian/config/etc/init.d/cloud-passwd-srvr
@@ -1,4 +1,4 @@
-#!/bin/sh -e
+#!/bin/bash 
 ### BEGIN INIT INFO
 # Provides:          cloud-passwd-srvr
 # Required-Start:    mountkernfs $local_fs cloud-early-config
@@ -10,4 +10,52 @@
 # Short-Description: Web server that sends passwords to User VMs
 ### END INIT INFO
 
-bash /opt/cloud/bin/passwd_server&
+
+ENABLED=0
+[ -e /etc/default/cloud-passwd-srvr ] && . /etc/default/cloud-passwd-srvr
+
+start() {
+  [ "$ENABLED" != 0 ]  || exit 0 
+  nohup bash /opt/cloud/bin/passwd_server&
+}
+
+getpid() {
+  pid=$(ps -ef | grep passwd_server | grep -v grep | awk '{print $2}')
+  echo $pid
+}
+
+stop_socat() {
+  spid=$(pidof socat)
+  [ "$spid" != "" ] && kill -9 $spid && echo "Killed socat (pid=$spid)" 
+  return 0
+}
+
+stop () {
+  stop_socat
+  pid=$(getpid)
+  [ "$pid" != "" ] && kill -9 $pid && echo "Stopped password server (pid=$pid)" && stop_socat && return 0
+  echo "Password server is not running" && return 0
+}
+
+status () {
+  pid=$(getpid)
+  [ "$pid" != "" ] && echo "Password server is running (pid=$pid)" && return 0
+  echo "Password server is not running" && return 0
+}
+
+case "$1" in
+   start) start
+	  ;;
+    stop) stop
+ 	  ;;
+    status) status
+ 	  ;;
+ restart) stop
+          start
+ 	  ;;
+       *) echo "Usage: $0 {start|stop|status|restart}"
+	  exit 1
+	  ;;
+esac
+
+exit 0
diff --git a/tools/systemvm/debian/config/etc/init.d/postinit b/tools/systemvm/debian/config/etc/init.d/postinit
index d063f077daf..f9502408978 100755
--- a/tools/systemvm/debian/config/etc/init.d/postinit
+++ b/tools/systemvm/debian/config/etc/init.d/postinit
@@ -47,11 +47,11 @@ start() {
 }
 
 stop() {
-
+   echo ""
 }
 
 status() {
-
+   echo ""
 }
 
 CMDLINE=$(cat /proc/cmdline)
diff --git a/tools/systemvm/debian/config/etc/rc.local b/tools/systemvm/debian/config/etc/rc.local
new file mode 100755
index 00000000000..cb434a23526
--- /dev/null
+++ b/tools/systemvm/debian/config/etc/rc.local
@@ -0,0 +1,15 @@
+#/bin/bash
+
+[ ! -f /var/cache/cloud/enabled_svcs ] && touch /var/cache/cloud/enabled_svcs
+for svc in $(cat /var/cache/cloud/enabled_svcs) 
+do
+   logger -t cloud "Starting $svc"
+   service $svc start
+done
+
+[ ! -f /var/cache/cloud/disabled_svcs ] && touch /var/cache/cloud/disabled_svcs
+for svc in $(cat /var/cache/cloud/disabled_svcs) 
+do
+   logger -t cloud "Stopping $svc"
+   service $svc stop
+done
diff --git a/tools/systemvm/debian/config/opt/cloud/bin/passwd_server b/tools/systemvm/debian/config/opt/cloud/bin/passwd_server
index c0326485f70..ee9e531d72e 100755
--- a/tools/systemvm/debian/config/opt/cloud/bin/passwd_server
+++ b/tools/systemvm/debian/config/opt/cloud/bin/passwd_server
@@ -1,16 +1,18 @@
 #!/bin/bash
 
+. /etc/default/cloud-passwd-srvr
 guestIp=$(ifconfig eth0 | grep 'inet addr:' | cut -d: -f2 | awk '{ print $1}')
 
-while true
+while [ "$ENABLED" == "1" ]
 do
 	socat TCP4-LISTEN:8080,reuseaddr,crnl,bind=$guestIp SYSTEM:"/opt/cloud/bin/serve_password.sh \"\$SOCAT_PEERADDR\""
 
 	rc=$?
 	if [ $rc -ne 0 ]
 	then
-		logger "Socat failed with error code $rc. Restarting socat..."
+		logger -t cloud "Password server failed with error code $rc. Restarting socat..."
 		sleep 3
 	fi
+        . /etc/default/cloud-passwd-srvr
 
 done
diff --git a/tools/systemvm/debian/config/opt/cloud/bin/patchsystemvm.sh b/tools/systemvm/debian/config/opt/cloud/bin/patchsystemvm.sh
index 30104ebf379..51f0bf1fbe6 100755
--- a/tools/systemvm/debian/config/opt/cloud/bin/patchsystemvm.sh
+++ b/tools/systemvm/debian/config/opt/cloud/bin/patchsystemvm.sh
@@ -25,6 +25,8 @@ consoleproxy_svcs() {
    chkconfig apache2 off
    chkconfig nfs-common off
    chkconfig portmap off
+   echo "cloud postinit ssh" > /var/cache/cloud/enabled_svcs
+   echo "cloud-passwd-srvr haproxy dnsmasq apache2 nfs-common portmap" > /var/cache/cloud/disabled_svcs
    mkdir -p /var/log/cloud
 }
 
@@ -36,6 +38,8 @@ secstorage_svcs() {
    chkconfig dnsmasq off
    chkconfig ssh on
    chkconfig apache2 off
+   echo "cloud postinit ssh nfs-common portmap" > /var/cache/cloud/enabled_svcs
+   echo "cloud-passwd-srvr haproxy dnsmasq" > /var/cache/cloud/disabled_svcs
    mkdir -p /var/log/cloud
 }
 
@@ -47,6 +51,8 @@ routing_svcs() {
    chkconfig ssh on
    chkconfig nfs-common off
    chkconfig portmap off
+   echo "cloud-passwd-srvr ssh dnsmasq haproxy apache2" > /var/cache/cloud/enabled_svcs
+   echo "cloud nfs-common portmap" > /var/cache/cloud/disabled_svcs
 }
 
 CMDLINE=$(cat /var/cache/cloud/cmdline)
diff --git a/tools/systemvm/debian/config/opt/cloud/bin/serve_password.sh b/tools/systemvm/debian/config/opt/cloud/bin/serve_password.sh
index d66f6553745..398a5591266 100755
--- a/tools/systemvm/debian/config/opt/cloud/bin/serve_password.sh
+++ b/tools/systemvm/debian/config/opt/cloud/bin/serve_password.sh
@@ -1,6 +1,8 @@
 #!/bin/bash
 
-# set -x
+# set -x 
+
+PASSWD_FILE=/var/cache/cloud/passwords
 
 #replace a line in a file of the form key=value
 #   $1 filename
@@ -26,7 +28,7 @@ get_value() {
 
 ip=$1
 
-logger "serve_password called to service a request for $ip."
+logger -t cloud "serve_password called to service a request for $ip."
 
 while read input
 do
@@ -47,23 +49,23 @@ done
 
 if [ "$request" == "send_my_password" ]
 then
-	password=$(get_value /root/passwords $ip)
+	password=$(get_value $PASSWD_FILE $ip)
 	if [ "$password" == "" ]
 	then
-		logger "send_password_to_domu sent bad_request to $ip."
+		logger -t cloud "serve_password sent bad_request to $ip."
 		echo "bad_request"
 	else
-		logger "send_password_to_domu sent a password to $ip."
+		logger -t cloud "serve_password sent a password to $ip."
 		echo $password
 	fi
 else
 	if [ "$request" == "saved_password" ]
 	then
-		replace_in_file /root/passwords $ip "saved_password"
-		logger "send_password_to_domu sent saved_password to $ip."
+		replace_in_file $PASSWD_FILE $ip "saved_password"
+		logger -t cloud "serve_password sent saved_password to $ip."
 		echo "saved_password"
 	else
-		logger "send_password_to_domu sent bad_request to $ip."
+		logger -t cloud "serve_password sent bad_request to $ip."
 		echo "bad_request"
 	fi
 fi