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It's difficult to weigh costs once you're at a static scale, but while bandwidth and storage is growing, cloud services tend to offer substantial savings. In this case, the cost benefits for S3 compared to owning your own servers are tremendous.

There are always concerns and risks involved with hosting personal data, but it's not fundamentally different based on cloud hosting compared to colocation (or even managing hardware at your own location). There's mild complexity because 3rd parties are involved, but this is quickly becoming the norm.

Amazon S3 is highly secure when configured correctly. The files are encrypted and only our servers can access them from our S3 buckets (i.e. no direct links). For more information on Amazon's security practices, see here: http://aws.amazon.com/security/

- Neal, co-founder of HelloFax

S3 is one of Amazon's most stable cloud offerings. It's been years since they had a major outage. It's possibly even more stable than hosting yourself.