Known issue - Local data access isn't allowed for pipeline using on-premises data gateway
For security considerations, local machine access is no longer allowed for a pipeline using an on-premises data gateway. To segregate storage and compute, you can't host data store on the compute where the on-premises data gateway is running.
Status: Open
Product Experience: Data Factory
Symptoms
You can try to access the local data source, such as REST, on the same server as the on-premises data gateway. When you try to connect, you receive an error message and the connection fails. The error message is similar to: ErrorCode=RestResourceReadFailed,'Type=Microsoft.DataTransfer.Common.Shared.HybridDeliveryException,Message=Fail to read from REST resource.,Source=Microsoft.DataTransfer.ClientLibrary,''Type=Microsoft.DataTransfer.SecurityValidation.Exceptions.HostValidationException,Message=Access to <local Ip address> is denied, resolved IP address is <local Ip address>, network type is OnPremise,Source=Microsoft.DataTransfer.SecurityValidation,'
Solutions and workarounds
Ensuring the security of your data is a top priority. The change is by security design, and there aren't any plans to revert. To use your pipeline securely, set up your data store on another server, which can be connected from on-premises data gateway.