Summary Yes, under the proposed Cloud and AI Development Act (CADA), a single public body can simultaneously act as both a sharing entity and a using entity within the EuroCloud Federation. Roles are assigned per service rather than per member, allowing for a dynamic, mutual exchange of idle capacity and cloud resources. This dual participation is explicitly supported by Article 35(1), which defines roles based on whether an entity provides or consumes a specific service, enabling a cooperative public-sector cloud ecosystem where capacity flows bidirectionally.

Detail

The EuroCloud Federation, established under Article 34 of the CADA proposal, is designed to facilitate the sharing of public-sector data centre services and cloud computing services between Union entities and public-sector bodies. A critical operational question for procurement officers and IT strategists is whether an organization must adopt a static roleβ€”either exclusively a provider or exclusively a consumerβ€”or if it can participate in both capacities depending on the specific transaction.

As proposed, the CADA framework is intentionally flexible. Article 35(1) clarifies that the roles of "sharing entity" and "using entity" are defined by the specific service transaction, not by the organization's overall status in the Federation. Specifically, the text states that a member of the EuroCloud Federation may share data centre services and cloud computing services with another member where the sharing entity owns the hardware through which the service is made available. Crucially, the regulation does not preclude that same member from simultaneously acting as a "using entity" to consume services from other members.

This structure supports a multi-sided marketplace where capacity is fluidly exchanged based on need and availability. For instance, a public body with surplus compute capacity in one data centre can offer those resources to other public bodies (acting as a sharing entity) while simultaneously accessing excess capacity from another member to handle peak loads or specific workloads (acting as a using entity). The regulation does not impose a binary classification on members; instead, it enables a dynamic ecosystem where an entity's role shifts depending on the specific service being exchanged.

To act as a sharing entity, a member must demonstrate to the Commission that it fulfils the conditions set out in Article 35(1) and (2). This includes proving that it directly, or indirectly through an intermediate legal entity it controls, owns the hardware providing the service. The entity must also put in place appropriate technical, operational, and organisational measures to ensure effective, secure, and resilient service provision. Once the Commission assesses and allows the sharing entity to participate, it can list its available capacity on the EuroCloud platform.

Conversely, when that same public body acts as a using entity, it accesses these shared services through the platform established by the Commission under Article 34(3). This platform provides a catalogue of available services and a service platform for the exchange and orchestration of computing, storage, and network resources.

The financial mechanism supporting this dual role is outlined in Article 35(5). The sharing entity may charge a fee to the using entity, but this fee is strictly limited to the costs incurred in relation to the sharing of the service. These costs include allocating and isolating resources, managing access, ensuring interoperability, and complying with Union law. Crucially, Recital 73 and Article 35(5) specify that these fees do not constitute a "pecuniary interest" within the meaning of Directive 2014/24/EU. Consequently, the sharing of services within the EuroCloud Federation does not fall under standard Union public procurement rules, provided the strict cost-recovery and public-interest conditions are met. This cost-recovery model applies regardless of whether the entity is sharing or using, facilitating a seamless, low-friction exchange of resources.

What this means for you

For public-sector procurement officers, IT directors, and national cloud strategists, this provision offers significant strategic advantages:

  1. Maximising Asset Utilization: You can cost-recover from idle infrastructure. If your data centre has unused capacity during off-peak hours, you can share it with other public bodies, recovering costs for power, cooling, and maintenance without entering a commercial market.
  2. Agility and Scalability: You are not locked into long-term procurement cycles for every spike in demand. If your department faces a temporary surge in AI workload or data processing needs, you can access shared capacity from other Federation members without issuing a full tender.
  3. Simplified Compliance: Because transactions within the EuroCloud Federation are exempt from standard public procurement procedures (provided the cost-recovery conditions are met), you can scale resources up or down quickly. This reduces administrative burden and accelerates deployment.
  4. Strategic Planning: When designing your national or regional cloud strategy, consider your infrastructure not just as a cost centre, but as a potential asset for the broader public sector. Assess which of your facilities could qualify as a sharing entity (i.e., where you own the hardware and meet the security/technical requirements) and which workloads could be offloaded to using-entity status.

To participate, ensure your entity is prepared to demonstrate compliance with the technical and organisational measures required by Article 35(2). This includes robust policies on risk analysis, information system security, incident handling, and business continuity.

Common misconceptions

Misconception 1: You must choose one role when joining the Federation. Some assume that upon joining the EuroCloud Federation, a public body must declare itself exclusively as a provider or a consumer. As clarified above, Article 35(1) makes it clear that roles are service-specific. You can be a sharing entity for Service A and a using entity for Service B simultaneously.

Misconception 2: Sharing services triggers full public procurement procedures. It is often assumed that any exchange of services between public bodies requires a tender. However, Article 35(5) and Recital 73 specify that fees limited to cost recovery do not constitute a pecuniary interest. Therefore, intra-Federation sharing is exempt from the standard public procurement directives, provided the strict cost-recovery and public-interest conditions are met.

Misconception 3: Private providers can directly join as members. Recital 71 and Article 35 clarify that participation is limited to public entities. Direct private participation is excluded where the sharing entity owns the hardware. Private providers cannot be members of the Federation, though public bodies may use private hardware if they own it or control the intermediate entity providing the service, subject to strict control criteria.

Misconception 4: The "using entity" pays market rates. The using entity does not pay a commercial price. The fee is strictly limited to the additional costs incurred by the sharing entity for that specific transaction (e.g., resource isolation, integration). It is not a profit-generating mechanism but a cost-allocation tool.

Related

This is general information about a draft EU regulation, not legal advice.