The answer is to use an on-premises data gateway and store the SQL Server credentials in the gateway data source settings. This approach is correct because the gateway acts as a secure bridge between the Power BI service and your on-premises SQL Server, encrypting and storing the credentials within the gateway configuration so they are never exposed to end users. On the PL-300 exam, this scenario tests your understanding of how to satisfy security requirements for hybrid data sources—combining cloud-based SharePoint Online with on-premises databases—without compromising credential confidentiality. A common trap is assuming that DirectQuery or a live connection alone handles security, but those methods still require credential management at the user level. Remember the key principle: the on-premises data gateway is the only way to keep on-premises credentials hidden from report viewers. Memory tip: think of the gateway as a locked vault—credentials go in, but users never see the key.
PL-300 Prepare the data Practice Question
This PL-300 practice question tests your understanding of prepare the data. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You are developing a Power BI semantic model that must combine data from an on-premises SQL Server database and a SharePoint Online list. The organization requires that credentials for the on-premises data source be stored securely and not shared with users. Which data connectivity approach should you use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Use an on-premises data gateway and store the SQL Server credentials in the gateway data source settings
Option A is correct because using an on-premises data gateway with credentials stored in the gateway data source settings allows the Power BI service to securely connect to the on-premises SQL Server without exposing credentials to users. The gateway acts as a secure bridge, storing the SQL Server credentials encrypted in the gateway configuration, which satisfies the requirement that credentials not be shared with users.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Use an on-premises data gateway and store the SQL Server credentials in the gateway data source settings
Why this is correct
The gateway stores credentials securely and users do not need access to the database.
Related concept
Read the scenario before looking for a memorised answer.
✗
Use DirectQuery with single sign-on for the SQL Server database
Why it's wrong here
Single sign-on passes user credentials, which may not have direct access to the database.
✗
Export the SQL Server data to an Excel file stored in SharePoint and then import from SharePoint
Why it's wrong here
This introduces data duplication and security risks, and is not recommended.
✗
Import data from SQL Server using Windows authentication embedded in the data source settings
Why it's wrong here
Embedded credentials expose them to users who can view data source settings.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often choose DirectQuery with SSO (Option B) thinking it avoids credential sharing, but SSO requires granting users direct database access, which violates the 'credentials not shared with users' requirement and does not work with a SharePoint Online list in a combined model.
Detailed technical explanation
How to think about this question
The on-premises data gateway uses a cloud service to encrypt and store data source credentials in Azure Key Vault, then establishes a secure outbound connection from the gateway to the Power BI service. When combining data from SQL Server and SharePoint Online, the gateway handles the on-premises source while SharePoint uses cloud-based authentication, requiring a composite model that supports both import and DirectQuery modes. In real-world scenarios, the gateway must be installed on a machine with network access to SQL Server, and the data source credentials are configured once in the gateway management portal, ensuring users never see or manage them.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Prepare the data — This question tests Prepare the data — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Use an on-premises data gateway and store the SQL Server credentials in the gateway data source settings — Option A is correct because using an on-premises data gateway with credentials stored in the gateway data source settings allows the Power BI service to securely connect to the on-premises SQL Server without exposing credentials to users. The gateway acts as a secure bridge, storing the SQL Server credentials encrypted in the gateway configuration, which satisfies the requirement that credentials not be shared with users.
What should I do if I get this PL-300 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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