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Power consumption accounts for a significant portion of a data center's operating expenses. Sadly, much of this power is wasted by servers that are left on even when there is no work to do. Dynamic power management aims to reduce power wastage in data centers by turning servers off when they are not needed. However, turning a server back on requires a setup time, which can adversely affect system performance. Thus, it is not obvious whether dynamic power management should be employed in a data center. In this paper, we analyze the effectiveness of dynamic power management in data centers under an M/M/k model via Matrix- analytic methods. We find that the effectiveness of even the simplest dynamic power management policy increases with the data center size, surpassing static power management when the number of servers exceeds 50, under realistic setup costs and server utilizations. Furthermore, we find that a small enhancement to traditional dynamic power management, involving delaying the time until a server turns off, can yield benefits over static power management even for data center sizes as small as 4 servers.