The techniques introduced here provide for efficient management of storage resources in a modern, dynamic data center through the use of virtual storage appliances. Virtual storage appliances perform storage operations and execute in or as a virtual machine on a hypervisor. A storage management system monitors a storage system to determine whether the storage system is satisfying a service level objective for an application. The storage management system then manages (e.g., instantiates, shuts down, or reconfigures) a virtual storage appliance on a physical server. The virtual storage appliance uses resources of the physical server to meet the storage related needs of the application that the storage system cannot provide. This automatic and dynamic management of virtual storage appliances by the storage management system allows storage systems to quickly react to changing storage needs of applications without requiring expensive excess storage capacity.