Data for a story can come from a file, a SAP Analytics Cloud model or dataset, or an outside data source.
A limitation to a public dataset is that you cannot change its data source. For example, if your public dataset was originally created from a flat file but you now want to use a BW query, you have no option to make that change. Embedded datasets, on the other hand, do allow you to change the data source via the 
Add New Data option.
You can also convert an embedded dataset into a model, but any transformations you made to the dataset are lost and must be recreated in the model. A public dataset cannot be converted to a model.
You can prepare and transform the data to meet your story needs in the Data Preparation area. Here, you can change the data, including adding transformations using either a simple or more robust transformation editor.
Note- If using data from SAP Datasphere, you directly access a SAP Datasphere model located in a specific space defined in SAP Datasphere.
- Data preparation is only possible with imported data. If you choose SAP Datasphere as your outside data source, you cannot manipulate the data because it is live, not imported.
