If an organization is already using on-premises databases (like SQL Server for example), then it's much easier to extend security permissions because they don't have to install a gateway. While Report Server limits a lot of the functionalities of Power BI (losing access to composite models, bookmarks, automatic DirectQuery page refreshing, and R/Python scripting come to mind here), there are a number of reasons why organizations choose to go this route. I'm still surprised by how often I use Power BI Report Server for projects, even as we put so many other processes and data models in cloud applications. If you're working on a Power BI model that you're going to share with others, you'll likely use either the service or Report Server to scale out your work.
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