You can outsource your hardware, but you can't outsource your responsibility. Backups and redundancy are your responsibility, not your service provider's.
Another thing of note is your service agreement. Check what responsibilities and restitution are present in the contract. If you need them to be liable for damages beyond downtime, make sure it says that in the contract. If you need them to failover, make sure it says that in the contract. If it doesn't, well... it's pretty much: "yeah, we lost all your data, good luck".
The company I work for has cloud hosting contracts which state if the service goes down, they are liable for a certain percentage of lost revenue due to the outage. This comes with a 100% uptime guarantee, including several failovers. We pay dearly for it, but if you need something specific, you'll likely be able to negotiate a contract based on what you need. If it's not in the contract, you won't get it was my point.
Fair enough; but you're still going to limit your liability. Assume your customer spends $10K/month with you; or $120K/year. Would you ever commit to compensating them $1MM+ in the event of an outage? Of course not. It would be business suicide.
If you want that level of uptime, you build out your own place (i.e. Amazon, Facebook, Google). If you're not big enough to build your own, you live with the possibility of downtime.
True story. I took your comment two ways, and wrote my response based on the wrong interpretation. For that I apologize. Of course we pay more than the host could ever be expected to pay out. It's an insurance policy, when it comes down to it. It's also less than we would have to pay to get our own datacenter put up faster. As a stop-gap between the time our software went live and the time when our datacenter will be operational, it's worth it. Time to market was very important, moreso than the cost we pay up front. Losing marketshare forever is worse than an $8b/yr company losing a few million dollars for just one quarter. You and I are not disagreeing.
But this is all getting off topic. What I was originally addressing was the OP's comment of "sorry, we lost your stuff, oh well". If you want that peace of mind, you're going to be paying for it.
"But this is all getting off topic. What I was originally addressing was the OP's comment of "sorry, we lost your stuff, oh well". If you want that peace of mind, you're going to be paying for it."
You know, even so, in the end it's your responsibility to your client, even though in practice you have to draw the line at some point and just point the finger at "Amazon is down" or w/e.