Universes are meta-data layers similar to Business Views. A Universe Connection is literally your method of connecting the Universe to its back-end data source (like a data connection in a Business View)... ODBC connection, etc.
Universes are created using the Universe Designer application.
Your CR Server license prevents you from using Universes and the Universe Designer. If you want to use a metadata layer in CR Server you should use Business Views. You need a BusinessObjects Enterprise license to use Universe Designer.
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