A system and computer program product for virtual machine placement in a datacenter include using one or more server power characteristics to determine a power cost for any given virtual machine placement in the datacenter, using a heat profile of one or more datacenter components in relation to one or more cooling resources in the datacenter to determine cooling cost for any given virtual machine placement in the datacenter, and using the power cost and cooling cost to apply integrated energy cost minimization at one or more levels of hierarchy in the datacenter to determine placement of a virtual machine in the datacenter such that the integrated energy cost of the datacenter is minimized.