An embodiment of the invention provides an apparatus and method for a policy-based storage appliance virtualization that identifies the storage space based on a desired storage management operation type. One example of a storage management operation type is the allocation of storage space from a storage appliance(s) to a host(s). The requested storage space amount to be allocated to a host is first specified in a management console. The management console checks one or more policies and compares the policies with the requested storage space amount and identity of the host, so that the management console identifies the storage space(s) that are available for allocation from a storage appliance(s) to the host. The management console may generate a candidate virtualized storage pool identification that identifies the storage space(s) that are available for allocation from the storage appliance(s) to the host. The server administrator then selects the storage space(s) to be allocated to the host. The policies may also be used as constraints to other storage management operation types besides the above-mentioned storage allocation to hosts.