What is on-premises vs cloud data source?

< 1 min read

On-premises data source means data is stored inside company network or local servers.
Examples are internal SQL Server, file servers, or ERP databases in office network.
Power BI needs a gateway to access these sources from the cloud service.
In my project, finance database was on-prem so we configured scheduled refresh via gateway.
Cloud data source means data is hosted on internet platforms like Azure, Salesforce, or SharePoint Online.
Power BI connects directly using credentials without gateway.
We used Azure SQL and Power BI connected instantly through OAuth authentication.
Cloud sources usually support faster refresh and easier maintenance.
On-prem gives more internal control but requires infrastructure management.
So main difference is network location and connectivity method.

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