Data center are critical infrastructures for internet-based services and the need for data centers is predicted to increase in the future for the rise of cloud ser-vices and other similar technologies popularity. Data centers use lots of energy and energy usage is one of the greatest expenses for data centers. The improvement of data centers energy efficiency is beneficial to service providers for the decrease in the data center’s running expenses and for the environmental benefits. This thesis is a literature review which studies software solutions presented in literature that can reduce the energy usage of a data center. The most prominent solutions presented in literature are virtual machine placement and load balancing. The resources of physical servers are shared between virtual machines that run applications. With efficient placement of the virtual machines the resource usage of the host machine and the sleep time of the physical machines, can be maximized and savings achieved in energy usage. Load balancing methods distribute the data center’s workload efficiently between the virtual machines to avoid overloading or underloading the physical machines. If needed the virtual machines can me migrated between the physical machines. There have been numerous methods developed to place virtual machines and to execute load balancing efficiently in data centers.