System and method for detecting and preventing service level agreement violation in a virtualized environment

This technique determines the possible Service Level Agreement (SLA) violation during migrating a workload from a physical environment to a virtualized environment and also migrating a virtual machine (VM) from one physical machine to another within a virtualized environment. This technique uses capacity factor, i.e. the ratio of host physical machine (host PM) capacity and target physical machine (target PM) capacity, to determine the service rate change in the target PM compared to host PM and eventually calculates the VM utilization and response time in the target PM. It then checks if the VM utilization and response time in the target PM lies within the SLA limit. It further checks if the migration in the target virtualized PM is violating a predefined target PM utilization threshold or not and finally causes the migration in the target physical machine if all the SLA parameters are satisfied.