|I guess the question you need to ask, and answer is, which solution is more cost effective for you?|
Personally, I don't like the idea of giving control of my data to someone else but in your case, it may be more cost effective to do so.
If you host your own server not only would you need a server, but you'll need a backup solution as well. Typically you would buy a server with a backup tape device in it so you could take tapes offsite for safety reasons (ie: the building burns down, you still have your data). As well as the tape backup solution, you might want to consider a small NAS for onsite backup.
All in all, it may very well be more cost effective to go with the cloud solution that provides the data security as well as everything else you need.
Each case is different and there's no way to know what the correct solution is without a whole lot more information. Not that this is the correct place to put that info and ask for a solution. You would probably want to hire a consultant to advise you after closely studying your situation. At least, that's what I would advise someone who doesn't know how to judge the situation for themselves to do.
It matters not how straight the gate,
How charged with punishments the scroll,
I am the master of my fate;
I am the captain of my soul.