Hi,
If the datasource is embedded, you would not require the definition of the data source in the report server. The embedded connection details is sufficient.
Yet having a defined datasource and using it as a shared data source would simplify multiple report development when they are all referring the same data source. When you happen to move the datasource to a different server, with shared data source,
all you need to do is modify the datasource where as in embedded connection it would draw you to change each report's connection.
Hope this helps.
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BH
