All Depends
On how Secure the Stored Data needs to be and how fast/expensive a Internet connection actually is.
You need to remember with Sensitive Data it all depends on How Sensitive it actually is and what if any penalties are involved in it getting loose. You also need to remember that most Encryption Programs have Back Doors that allow the Authorities access to the Data. So encrypting the data may very well not mean that it is unreadable by anyone but the Authorized Company Staff.
Things like Medical Records also have the possibility to mean that Legal Action is Instantly instigated whenever there is a Breach so the possibility of Huge Legal Bills needs to be taken into account as well as the added expenses of increased Internet Traffic if a Cloud Solution is contemplated. Also in the same vein if the ISP gets disconnected for any length of time will the organization be able to continue working or will they need to shut up shop till the Internet again becomes available?
There also needs to be a stated Agreement in the event of the Cloud Provider going broke or being bought out as to what happens to the companies data and could it possibly be sold to the highest bidder if a Liquidator is Appointed.
Personally I believe that no matter what you do anything stored in a Public Cloud should be considered as Public Domain so for me at least that Immediately rules out any Secure or Sensitive Data. 
Col
What to Recommend Server or Use the Cloud?
The client currently has 5 workstations,where 4 of the workstations go to a shared folder on one of the workstations to access shared files. The client now wants to upgrade all their workstations to brand new machines. Total data over these 5 machines comes to about 50GB.
The client may be looking to double their number of employees/workstations over the coming months.
The client deals with sensitive data - so cloud backup would need to be encrypted (and I know of several that are).
I'm leaning more towards the centralised server option - mainly for login terminals on the workstations and sharing these files correctly. It is possible that employees *might* benefit from logging on a different terminal, but this was not discussed in our earlier meeting,
I know you can use RAID on a server, but I'm trying to get a definitive way forward for the client - server or cloud. It would be great if extra benefits could be told to me so I can lay this all out as a decision maker.
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