In one word. Manageability.
Let me explain. In SSRS, reports need data sources. And data sources can be of two types: 1) Embedded 2) Shared. When a report uses the embedded data source, the data source properties are stored along with the report. If you’ve 5 reports that use the same data source & you decide to go via the embedded data source route then you’ll have 5 data source properties. If you need to change the data source property like change the server name then you’ll have to edit 5 different data source properties. Not efficient!
But if you use the Shared Data Source, then you can update data source properties from one location. Multiple reports can link to the shared data source & if there is a need to change the data source property, then you’ll have to do it only once.
Other benefit, you can take a data source offline if you ever have that need. This will pause all reports that are using this data source & also, stop all report subscriptions.
So, where do you configure embedded/shared data source? When you “Add a data source” to a report, you have the option to choose the data source type:
In this blog post, we saw how shared data source can help you manage your reports efficiently.