Difference in storage method for DMS and Services for Object

Hi-
Our R/3 version is: 4.7 Enterprise.
In most (if not all) of the transactions users execute, there is a feature where they can attach a file using "Services for Object" from their PC to the associated record (i.e. material master, purchase orders, service notifications, etc.)
What I would like to know is where the document is stored. From what I found on help.sap.com it says that it is a link from the user's PC. But I would guess it is storing a copy of the file as a blob on the R/3 server somewhere. Is this true? Or is there a risk if the user's harddrive dies, that the file is no longer available for viewing?
I am trying to determine the difference between using the Services for Object feature vs. DMS and setting up an object link for the specific object type (i.e. material).
Thanks!
-Jenn

I found the following about Services for Objects:
Business Workplace
The documents that were appended to an object using Create attachment and Create note are stored in the Business Workplace. There, for example, you can make settings for where the documents should be stored (R/3 System or Web Server) and which document classes may be loaded in the SAP System (for example DOC, but not EXE).
Sending is also carried out internally using the Business Workplace. Messages are created that contain a link to the object as an attachment. By double-clicking on the attachment, the users can call the default method of the object. This is normally the display method.

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Difference in storage method for DMS and Services for Object

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