Given that the connection is live, wouldn't the data be refreshed when you open the report?
But the Access database is not stored in the server..
Does that mean to use <Data Update Time> connecting from a local database, the data needs to be extracted to show the correct time it is updated?
And for connecting Live, the database needs to be on the server?
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It depends how you connect to it. You said you made a live connection which I assumed meant you made a live connection to an access database hosted on a central network drive which the Tableau Server has access to. If that's true, Tableau Server will run live queries against the database.
If this isn't true, then you must have published using an extract.
I don't know what's the right approach for you. Take a look at this KB article, right at the end for a description on how the timestamp is calculated: Adding Data Refresh Time Stamp to a View in a Dashboard | Tableau Software
Thank you Tom, this helped clarify the differences.