In the era of Internet of Things, all components in intelligent transportation systems will be connected to improve transport safety, relieve traffic congestion, reduce air pollution and enhance the comfort of driving. The vision of all vehicles connected poses a significant challenge to the collection and storage of large amounts of traffic-related data. In this article, we propose to integrate cloud computing into vehicular networks such that the vehicles can share computation resources, storage resources and bandwidth resources. The proposed architecture includes a vehicular cloud, a roadside cloud, and a central cloud. Then, we study cloud resource allocation and virtual machine migration for effective resource management in this cloud-based vehicular network. A game-theoretical approach is presented to optimally allocate cloud resources. Virtual machine migration due to vehicle mobility is solved based on a resource reservation scheme.Rong Yu [S05, M08] (yurong@ieee.org) received his Ph.D. from Tsinghua University, China, in 2007. After that, he worked in the School of Electronic and Information Engineering of South China University of Technology (SCUT). In 2010, he joined the Institute of Intelligent Information Processing at Guangdong University of Technology (GDUT), where he is now an associate professor. His research interest mainly focuses on wireless communications and networking, including cognitive radio, wireless sensor networks, and home networking. He is the co-inventor of over 10 patents and author or co-author of over 50 international journal and conference papers. Dr. Yu is currently serving as the deputy secretary general of the Internet of Things (IoT) Industry Alliance, Guangdong, China, and the deputy head of the IoT Engineering Center, Guangdong, China. He is the member of home networking standard committee in China, where he leads the standardization work of three standards. 9 Yan Zhang [SM10] (yanzhang@ieee.org) received a Ph.D. degree from Nanyang Technological University, Singapore. He is working with Simula Research Laboratory, Norway; and he is an adjunct Associate Professor at the University of Oslo, Norway. He is an associate editor or guest editor of a number of international journals. He serves as organizing committee chairs for many international conferences. His research interests include resource, mobility, spectrum, energy, and data management in wireless communications and networking. and the Head of the Network Convergence Laboratory (NCL) in Essex. His main research interests include wireless networks/communications, fixed mobile convergence, future Internet technology and network virtualization. He has published over 150 papers in the above research areas. He serves on the editorial boards of both IEEE and non-IEEE journals. He is a Senior Member of IEEE and a Fellow of IET.