A cloud data center is established to meet the storage demand due to the rate of growth of data. The inefficient use of resources causes an enormous amount of power consumption in data centers. In this paper, a fuzzy soft set-based virtual machine (FSS_VM) consolidation algorithm is proposed to address this problem. The algorithm uses four thresholds to detect overloaded hosts and applies fuzzy soft set approach to select appropriate VM for migration. It considers all factors: CPU utilization, memory usage, RAM usage, and correlation values. The algorithm is experimentally tested for 11 different combinations of choice parameters where each combination is considered as fuzzy soft set and compared with existing algorithms for various metrics. The experimental results show that proposed FSS_VM algorithm achieves significant improvement in optimizing the objectives such as power consumption, service level agreement violation rate, and VM migrations compared to all existing algorithms. Moreover, performance comparison among the fuzzy soft set-based VM selection methods are made, and Pareto-optimal fuzzy soft sets are identified. The results show that the Pareto-based VM selection improves the QoS. The time complexity of the proposed algorithm increases when it finds best VM for migration. The future work will reduce the time complexity and will concentrate on developing an efficient VM placement strategy for VM migration since it has the greater impact on improving QoS in VM placement.