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Per this article https://powerbi.microsoft.com/en-us/documentation/powerbi-desktop-use-directquery/
"For data sources other than Azure SQL Database or Azure SQL Data Warehouse that use DirectQuery, an Enterprise Gateway must be installed and the data source must be registered to establish a data connection."
So I am not expecting to have to setup a Gateway when I publish a report with a single Azure SQL Database as the source. However, whenever I attempt to publish a source from Desktop to Power BI I get the error message below.