A method, a non-transitory computer-readable storage medium, and a computer system for managing bandwidth allocated to a virtual machine running on a host computer is disclosed. In an embodiment, a method involves obtaining the current bandwidth for a virtual machine running on a host computer, determining bandwidth demand for the virtual machine as a function of the current bandwidth and a growth margin, and adjusting a bandwidth cap for the virtual machine based on the determined bandwidth demand. In an embodiment, when applied, the technique allows for bandwidth to be allocated to the virtual machines without the sum of allocated bandwidth exceeding a global bandwidth cap.