Computer Network and Internet is growing every day. Computer networks allow communicating faster than any other facilities. These networks allow the user to access local and remote databases. It is impossible to protect every system on the network. In industries, the network and its security are important issues, as a breach in the system can cause major problems. Intrusion detection system (IDS) is used for monitoring the processes on a system or a network for examining the threats and alerts the administrator about attack. And IDS provide a solution only for the large scale industries, but there is no solution for the small scale industries so model is proposed for honeypot to solve the problem of small scale industries which is the hybrid structure of Snort, Nmap, Xprobe2, and P0f This model captures the activities of attackers and maintains a log for all these activities. Virtualization is performed with the help of virtual machine. The focus of this report is primarily on preventing the attacks from external and internal attackers and maintaining the log file using honeypot with virtual machine .