An apparatus and method for dynamically allocating resources across multiple virtual machines. The method monitors the activities of the applications in each virtual machine running on a hosting server, determines the activities of the applications in each virtual machine based on the activities of the monitored applications, prioritizes each virtual machine based on the determined priorities of the applications in each virtual machine, and dynamically adjusts the resource allocation of each virtual machine on the hosting server based on the priority of each virtual machine. The resources of the hosting server can be dynamically allocated to each virtual machine according to the real-time resource requirement of the active applications, and the applications of different virtual machines can negotiate the resource allocation on the hosting server.