Yes, Power BI Embedded can work without using an Azure SQL Database. While Azure SQL is a common and seamless choice, Power BI Embedded supports a wide range of data sources, including on-premises databases, cloud databases (like Amazon Redshift, Google BigQuery), and even non-relational sources like Excel files or REST APIs, depending on how the data is modeled and published.
The key requirement is that the dataset you embed in your application must be hosted in a Power BI workspace backed by a dedicated capacity (like Power BI Premium or Embedded SKU). You can use import mode (where data is preloaded into Power BI) or DirectQuery (for live connections), and both modes work with sources beyond Azure SQL—provided connectivity and authentication (e.g., via gateway or OAuth) are properly configured.
Pros of using alternative data sources:
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Greater flexibility to integrate with your existing infrastructure.
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Potential cost savings if you already have on-prem or non-Azure cloud databases.
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Avoids vendor lock-in to Azure SQL.
Cons:
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May require additional setup like data gateways for on-prem sources.
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Performance tuning and security can be more complex with non-native sources.
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Less tight integration compared to using Azure-hosted services.
