In this paper, we investigate the issue of minimizing data center energy usage. In particular, we formulate a problem of virtual machine placement with the objective of minimizing the total power consumption of all the servers. To do this, we examine a CPU power consumption model and then incorporate the model into an mixed integer programming formulation. In order to find optimal or near-optimal solutions fast, we resolve two difficulties: non-linearity of the power model and integer decision variables. We first show how to linearize the problem, and then give a relaxation and iterative rounding algorithm. Computation experiments have shown that the algorithm can solve the problem much faster than the standard integer programming algorithms, and it consistently yields near-optimal solutions. We also provide a heuristic min-cost algorithm, which finds less optimal solutions but works even faster.