There is a method and system for capability-based resource allocation in a software-defined environment that performs the following steps (not necessarily in the following order): (i) determining a set of capability characteristics for a plurality of workload resources within a software-defined environment; (ii) determining a set of workload components for a specified workload; and (iii) identifying a set of workload resources from the plurality of workload resources to allocate to the specified workload based, at least in part, on the set of capability characteristics corresponding to each workload within the set of workload resources. A workload component of the set of workload components has a unique set of workload characteristics.