Cloud computing model separates usage from ownership in terms of control on resource provisioning. Resources in the cloud are projected as a service and are realized using various service models like IaaS, PaaS and SaaS. In IaaS model, end users get to use a VM whose capacity they can specify but not the placement on a specific host or with which other VMs it can be co-hosted. Typically, the placement decisions happen based on the goals like minimizing the number of physical hosts to support a given set of VMs by satisfying each VMs capacity requirement. However, the role of the VMM usage to support I/O specific workloads inside a VM can make this capacity requirement incomplete. I/O workloads inside VMs require substantial VMM CPU cycles to support their performance. As a result, placement algorithms need to include the VMM's usage on a per VM basis. Secondly, cloud centers encounter situations wherein change in existing VM's capacity or launching of new VMs need to be considered during different placement intervals. Usually, this change is handled by migrating existing VMs to meet the goal of optimal placement. We argue that VM migration is not a trivial task and does include loss of performance during migration. We quantify this migration overhead based on the VM's workload type and include the same in placement problem. One of the goals of the placement algorithm is to reduce the VM's migration prospects, thereby reducing chances of performance loss during migration. This paper evaluates the existing ILP and First Fit Decreasing (FFD) algorithms to consider these constraints to arrive at placement decisions. We observe that ILP algorithm yields optimal results but needs long computing time even with parallel version. However, FFD heuristics are much faster and scalable algorithms that generate a sub-optimal solution, as compared to ILP, but in time-scales that are useful in real-time decision making. We also observe that including VM migration overheads in the placement algorithm results in a marginal increase in the number of physical hosts but a significant, of about 84 percent reduction in VM migration.