Energy consumption in data centres accounts for a significant proportion of national energy usage in many countries. One approach for reducing energy consumption is to improve the server usage efficiency via workload consolidation. However, there are two primary reasons why this is not done to a large extent. The first reason is that greater consolidation could result in violations of Service Level Agreements (SLAs) if resources are over-utilised. The second reason is that users specify the requirements of a virtual machine (VM) based on the maximum estimated usage for each resource over the whole life span of the VM, and usually over-estimate these maximum values to avoid possible contract violations. Typically, the VM will have significantly lower resource usage in most time periods. Recently, a number of methods have been proposed to predict resource usage of VMs. We show that although these prediction techniques are efficient when their performances are measured using well known metrics, a low prediction error can still result in significant violations of SLAs if not handled properly during workload allocation. Our results emphasise the importance of analysing workload prediction in conjunction with workload allocation techniques. We examine the impact of using predicted resource usage for optimal server consolidation. We investigate the occurrences of over-utilised resources on servers due to under-predicted resource usage. We propose methods to reduce the likelihood of such occurrences, both through the enforcement of safety capacities on the server side, and through biasing towards over-prediction on the VM side. The results indicate that an appropriate balance can be found between energy savings and non-violation of SLAs.