In a stand mixer with a whisk attachment, cream butter until it is soft and smooth.
Add half of the powdered sugar and mix until combined.
Add the other half of the powdered sugar, milk and vanilla extract and mix until light and fluffy.
Divide the frosting in half.
Use one half of the frosting to frost the entire surface of the cooled sheet cake.
Divide the other half of the frosting into 6 different bowls.
Color each bowl the desired color - leaving one white for the clouds.
Prepare piping bags fit with a small star tip.
Transfer colored frosting to piping bag.
Use a toothpick or knife to sketch out the shape of your rainbow.
Carefully pipe your rainbow with your desired colors.
Use an offset spatular to create the clouds at the bottom of the rainbow.
Add sprinkles if desired.