Abstract: A peak power management system for networked smart IT devices. These smart devices have computing capability with at least one CPU and memory and can be networked. An uninterruptible power supply provides power to the smart devices. A central intelligent power management server controls the power consumed by all the smart devices networked with the server. The system uses priority based peak power management policies for smart IT devices assisted by fine grain control of external power drawn by each device. By applying different power management policies at different scheduled intervals and controlling the power consumption on the smart devices, the aggregated peak power demand is controlled. The policies can be adapted in-time to suit the actual, real-time power requirement of devices, their priorities, and applicable peak power limit at that time. Also, dynamic policy based peak power management can be extended to an intelligent hierarchical power distribution network.