In the case of IIS processes each process has a limitation of the used for it data - memory for the IIS process. During the report generation beside the retrieved data, there are newly generated resources by the report, which are held in memory. Thus the machine should have enough memory and CPU to handle the amount of data and the document processing.
Our concerns about rendering large amount of pages are already known. My colleague has explained them here. (Performance Considerations) - link to our performance considerations article, where you can find suggestions how to optimize the report e.g., filter data on retrieval, enable the reports resources caching and etc.
You can test the HTML5 Report Viewer and deploy the application in a web farm by configuring the Reporting REST service IStorage. Thus requests for reports can be balanced between multiple machines.
I hope the provided information is helpful.
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