Difference between DirectQuery and In-memory mode in tabular mode analysis services

Tabular models are one of the new enhancements coming in SQL Server 2012 especially with tabular mode analysis services. Querying data from these models is available in two modes: DirectQuery mode and In-memory mode. Those who are well versed with Multidimensional mode analysis services can grasp this very easily. DirectQuery mode is synonymous to ROLAP mode and In-memory mode is synonymous to MOLAP mode. DirectQuery reads data right from the relational data source while the in-memory mode queries data from the memory cache. Both has its own tradeoffs and benefits. More on the same can be read from here.

Interesting part about tabular models and these mode of queries is linked to a different fact. In SQL Server 2012 tabular mode analysis services, analysis services tabular projects can have just one model per solution. I find it a very serious limitation. But the data sources from where data can be sourced is immensely huge, and the list includes sources like Parallel Data Warehouse and ATOM feeds including SSRS reports too. This open up a huge range of interesting possibilities when these modes of querying data is linked with these data sources. For example, Parallel Data Warehouse can be linked to a tabular model, which in turn is used by an SSRS report as a source. Using DirectQuery mode, SSRS can fetch data from Parallel Data Warehouse in real time. This is one such example, but there are a huge range of interesting possibilities that these two modes can open up with interesting combinations of data sources. Check it out yourself.