First, no, you do not “have to” use iCloud.  If you have a PC or Mac you can 
store backups on that machine.

Second, the advantages of using iCloud is threefold in my opinion:

1) Your’er not using memory on your pC or Mac (probably negligible, but thought 
I should mention it).

2) If you have more than one Apple platform (Mac, iPhone, iPad, iPod) it 
conveniently allows for document and data sharing across all platforms.  I did 
not fully appreciate this benefit until I upgraded from a Windows PC to a Mac 
Mini and then ultimately got an iPad (to accompany my iPhone). It’s extremely 
to share features, events and data across these three Apple products and I 
personally love it.

3) If you should need to recover your iPhone and you aren’t nowhere near your 
PC or Mac the recovery/backup can be done simply by having Internet access.  
Then, of course, executing an iCloud backup.

Now, frankly I could have written a small dissertation on how to do these 
things but I trust this basic answer will suffice for now.

HTH


****************
- Bill & Leader Dog Holland
- "The problem with people who have no vices is that you can be pretty sure 
they are going to have some pretty  annoying virtues."
- Elizabeth Taylor, 20th Century Screen Actress, (1932-2011)--

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