The invention provides a storage system that includes a policy manager. The policy manager has a user interface and a policy engine which encodes performance and workload requirements of tablespaces in a policy that is based on user input received through the user interface. Databases are connected to the policy manager and tablespaces are connected to the databases. The databases create the tablespaces, and the databases establish a storage allocation for the tablespace based on the policy. The policy manager detects if the tablespace is out of storage and automatically extends the storage allocation for the tablespace based on the policy, when the tablespace is out of storage.