Abstract: A power optimization system and method for virtualized environments at least comprising a domain layer on which a plurality of virtual machines are implemented, a hardware layer and hypervisor layer configured for abstracting between the virtual machines of the domain layer and the hardware layer, wherein the system comprises a hardware interface to set a limit on the power consumption of at least one processing means implemented in a hardware layer and a software structure for performing an optimization of the available resource allocations for the running workload in terms of power consumption, wherein the software structure is an Observe-Decide-Act control loop structure, comprising an observe stage, a decide stage and an act stage, and wherein the observe stage interfaces with means configured for reading performance values inside at least one model specific register of the at least one processing means.