1. A method for managing an entity, said method comprising: establishing a framework for characterization of the entity by abstracting operation of the entity to a state machine, wherein each state in the state machine is characterized in terms of distributions of a performance metric associated with the entity, and wherein abstracting operation of the entity comprises: determining a set of a plurality of states (n) of the entity; determining a n×n transition matrix such that an element (i,j) of the transition matrix specifies the probability of the entity transitioning from a state i to a state j; determining a set of m symbols that correspond to events that lead to the transitions from state i to state j; and determining a n×n×m matrix that specifies events that lead to transitions such that an element (i,j,k) of the n×n×m matrix specifies the probability that event (k) causes a transition from state i to state j; and implementing, by a processor, the framework for characterization of the entity to manage the entity.