If you are using someone else's servers, encryption is a very vague term on its own. Does the encryption happen on the client end? Is there encryption at rest? Does it stay encrypted as it travels from client to server and server to client? Is there monitoring software on the third party's servers? What happens when there is a court order for the data? Do you know the people who have access to the data center? How secure is there data center?  What type of encryption do they use? Is it open source?

So, there is a lo of trust you have to have in another when the store "your" data.