Power BI Architecture – A Detailed Breakdown

Power BI is a powerful Business Intelligence (BI) tool developed by Microsoft that enables users to analyze, visualize, and share insights from their data. It follows a robust three-tier architecture that includes Data Sources, Data Processing, and Data Presentation.

In this detailed guide, we will cover:

Introduction to Power BI Architecture
Power BI Components
Power BI Architecture Flow
Power BI Service Architecture
Power BI Data Connectivity
Power BI Data Processing & Transformation
Power BI Storage & Data Models
Power BI Visualization & Report Generation
Power BI Deployment Options
Power BI Security & Compliance
Power BI Licensing & Pricing
Final Thoughts on Power BI Architecture

1. Introduction to Power BI Architecture

Power BI follows a three-layered architecture:

Data Source Layer – Connects to various data sources such as databases, cloud services, and APIs.
Data Processing Layer – Uses Power Query, Power Pivot, and Power BI Service to clean, model, and process data.
Data Presentation Layer – Provides dashboards, reports, and insights through Power BI Desktop, Power BI Service, and Power BI Mobile.

This architecture makes Power BI a scalable, secure, and efficient BI tool for organizations of all sizes.

2. Power BI Components

Power BI consists of several components that work together to deliver a seamless BI experience:

a) Power BI Desktop

A Windows-based application used to create reports and dashboards.
Allows data import, transformation, and visualization.

b) Power BI Service (Cloud)

A cloud-based service that allows users to publish, share, and collaborate on reports.
Provides features like automatic data refresh, AI-powered analytics, and security management.

c) Power BI Mobile

A mobile application available on iOS and Android for viewing reports and dashboards on the go.

d) Power BI Report Server

An on-premises version of Power BI for organizations with strict data security policies.
Supports Paginated Reports (SSRS) and interactive dashboards.

e) Power BI Embedded

Allows developers to integrate Power BI reports into custom applications using APIs.

3. Power BI Architecture Flow

The Power BI architecture flow consists of the following steps:

Connect to Data Sources – Power BI connects to databases, cloud platforms, and APIs.
Extract, Transform, and Load (ETL) – Data is cleaned, transformed, and prepared using Power Query.
Data Modeling – Relationships and calculations are defined using Power Pivot & DAX (Data Analysis Expressions).
Data Visualization – Reports and dashboards are built using Power BI Desktop.
Publishing & Sharing – Reports are shared via Power BI Service, Report Server, or Embedded.
Data Refresh & Security – Scheduled refreshes and role-based access control (RBAC) ensure data security.

4. Power BI Service Architecture

Power BI Service is hosted on the Azure Cloud and operates on a multi-tiered architecture:

Frontend (User Interface Layer) – Handles report viewing, dashboard interactions, and sharing.
Backend (Data Processing Layer) – Manages data refresh, AI-powered insights, and user authentication.
Storage Layer – Stores reports, datasets, and security metadata in Azure SQL Database, Azure Blob Storage, and Azure Analysis Services.

5. Power BI Data Connectivity

Power BI can connect to various data sources, including:

a) On-Premises Data Sources

SQL Server, Oracle, MySQL, PostgreSQL
SharePoint, SAP HANA, IBM DB2

b) Cloud-Based Data Sources

Azure SQL Database, Azure Data Lake
Google BigQuery, Snowflake, AWS Redshift

c) Online Services & APIs

Microsoft Dynamics 365, Salesforce
Google Analytics, Facebook Ads, Twitter

Power BI uses DirectQuery, Import Mode, and Live Connection to interact with data sources.

6. Power BI Data Processing & Transformation

a) Power Query (ETL)

Cleans and transforms raw data into a structured format.
Supports M Language for advanced transformations.

b) Power Pivot (Data Modeling)

Creates relationships between tables and defines DAX calculations.

c) DAX (Data Analysis Expressions)

A powerful formula language used for calculations, aggregations, and custom measures.

7. Power BI Storage & Data Models

Power BI supports different storage modes:

Import Mode – Data is loaded into the Power BI dataset for fast performance.
DirectQuery Mode – Queries data directly from the source (useful for large datasets).
Live Connection Mode – Connects to Azure Analysis Services or SQL Server Analysis Services (SSAS).

8. Power BI Visualization & Report Generation

Power BI provides multiple visualization options:

Bar charts, line charts, scatter plots
Pie charts, tables, matrices
Custom visualizations via Power BI Marketplace

Reports can be interactive and dynamic, allowing drill-through and filtering.

9. Power BI Deployment Options

Power BI can be deployed in different environments:

Cloud (Power BI Service) – Hosted on Microsoft Azure, best for collaboration.
On-Premises (Power BI Report Server) – Suitable for organizations with strict data security requirements.
Embedded (Power BI Embedded) – For developers integrating Power BI into custom applications.

10. Power BI Security & Compliance

Power BI ensures enterprise-grade security through:

Role-Based Access Control (RBAC) – Restricts user permissions.
Row-Level Security (RLS) – Limits data access within a dataset.
Azure Active Directory (AAD) Integration – Provides authentication and Single Sign-On (SSO).
Data Encryption – Uses Azure Security Center for encryption.

Power BI also complies with GDPR, HIPAA, ISO 27001, and SOC 2 regulations.

11. Power BI Licensing & Pricing

Power BI offers different licensing options:

Plan	Pricing	Features
Power BI Free	$0/user	Basic reports, limited data storage
Power BI Pro	$10/user/month	Full features, sharing & collaboration
Power BI Premium	$20/user/month	AI-powered analytics, paginated reports
Power BI Embedded	Custom pricing	For developers integrating Power BI into apps

12. Final Thoughts on Power BI Architecture

Power BI’s architecture is scalable, flexible, and secure, making it ideal for businesses of all sizes. Key takeaways:

Power BI integrates with multiple data sources and supports advanced analytics.
Power BI Service enables collaboration through cloud-based sharing.
Power BI ensures security and compliance, making it suitable for enterprises.
Flexible deployment options allow organizations to choose between cloud, on-premises, or embedded solutions.

Power BI remains one of the best BI tools for data-driven decision-making.