An apparatus and method uses location based authentication of a user accessing a virtual machine (VM) by using the physical location of the virtual machine as a criteria for the authentication. When a user requires a logical partition to run in a known, specified physical location, the user specifies the physical location when the VM is created. The specified physical location is then incorporated into the user authentication process. Users are challenged and must know the physical location in order to be authenticated to the system. When a “disruptive event” in the cloud environment occurs that necessitates moving the VM to another location, the original physical location is stored so the virtualization manager later can automatically relocate the VM back to its original physical location.