Abstract : In a multi-cloud environment, distributed application may need to have minimal inter-node latency to improve their performance. In this paper, We propose a model for the grouping of nodes with respect to network latency. The application scheduling is done on the basis of network latency. This model is a part of our proposed Cloud Scheduler module, which helps the scheduler in scheduling decisions on the basis of different criteria. Network latency and resultant node grouping on the basis of this latency is one of those criteria. The main essence of the paper is that our proposed latency grouping algorithm not only have no additional network traffic for algorithm computation but also works well with incomplete latency information and performs intelligent grouping on the basis of latency. This paper addresses an important problem in cloud computing, which is locating communicating virtual machines for minimum latency between them and group them with respect to inter-node latency.