Both but I prefer having my Apps on my computer this way I control my Apps and media, especially after hearing from many people that Apple took down Apps they owned from the App Store, also there are new complaints of People who paid for Apps then the App disappeared for a week from the App Store and when it came back it was under a different developer name and they couldn't install without paying again so not to get into a weird situation like that I bought a 3Tera external hard drive, got my iTunes running on it perfectly.
Also restoring from the iCloud backup is only possible after doing a complete restore on your iDevice but with iTunes no restoring of the device needed for restoring any of the backups that you got saved.
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