diff --git a/server/src/com/cloud/agent/manager/AgentManagerImpl.java b/server/src/com/cloud/agent/manager/AgentManagerImpl.java
index cdc3fbe2c3a..4e15edfcae9 100755
--- a/server/src/com/cloud/agent/manager/AgentManagerImpl.java
+++ b/server/src/com/cloud/agent/manager/AgentManagerImpl.java
@@ -3031,7 +3031,7 @@ public class AgentManagerImpl implements AgentManager, HandlerFactory,
 			if (capacityVOCpus != null && !capacityVOCpus.isEmpty()) {
 				CapacityVO CapacityVOCpu = capacityVOCpus.get(0);
 				long newTotalCpu = (long) (server.getCpus().longValue()
-						* server.getSpeed().longValue() * _cpuOverProvisioningFactor);
+						* server.getSpeed().longValue());
 				if ((CapacityVOCpu.getTotalCapacity() <= newTotalCpu)
 						|| ((CapacityVOCpu.getUsedCapacity() + CapacityVOCpu
 								.getReservedCapacity()) <= newTotalCpu)) {
@@ -3056,7 +3056,7 @@ public class AgentManagerImpl implements AgentManager, HandlerFactory,
 						server.getClusterId(),
 						0L,
 						(long) (server.getCpus().longValue()
-								* server.getSpeed().longValue() * _cpuOverProvisioningFactor),
+								* server.getSpeed().longValue()),
 						CapacityVO.CAPACITY_TYPE_CPU);
 				_capacityDao.persist(capacity);
 			}
diff --git a/server/src/com/cloud/server/ManagementServerImpl.java b/server/src/com/cloud/server/ManagementServerImpl.java
index cbf57f388b5..a5298b44866 100755
--- a/server/src/com/cloud/server/ManagementServerImpl.java
+++ b/server/src/com/cloud/server/ManagementServerImpl.java
@@ -1302,7 +1302,13 @@ public class ManagementServerImpl implements ManagementServer {
 			s_logger.debug("Searching for hosts in cluster: " +cluster+ " having required CPU: " +requiredCpu+ " and RAM:"+ requiredRam);
 		}
 
-    	List<Long> hostsWithCapacity = _capacityDao.listHostsWithEnoughCapacity(requiredCpu, requiredRam, cluster, hostType.name());
+        String opFactor = _configDao.getValue(Config.CPUOverprovisioningFactor.key());
+        float cpuOverprovisioningFactor = NumbersUtil.parseFloat(opFactor, 1);
+        if (s_logger.isDebugEnabled()) {
+            s_logger.debug("CPUOverprovisioningFactor considered: " + cpuOverprovisioningFactor);
+        }
+        List<Long> hostsWithCapacity = _capacityDao.listHostsWithEnoughCapacity(requiredCpu, requiredRam, cluster, hostType.name(), cpuOverprovisioningFactor);
+
 
 		if(s_logger.isDebugEnabled()){
 			s_logger.debug("Hosts having capacity: "+hostsWithCapacity );