Server consolidation using virtual machine resource tradeoffs, is provided. One implementation involves assigning a virtual machine to a target physical server based on a plurality of virtualization parameters for maximizing utility of a plurality of virtual machines and physical servers. The assigning performs resource allocation for the virtual machine based on capabilities of the target physical server and a plurality of virtual machine resource requirements. Virtualization parameters include a reservation parameter (min) representing a minimum resources required for a VM, a limit parameter (max) representing a maximum resources allowable for the VM, and a weight parameter (shares) representing a share of spare resources for the VM.