Compared to?
Backups are something you should have regardless, an account with other providers and means to spin up some nodes is just basic common sense.
Vote with your wallet, let the execs know and never come back, it's honestly that simple.
Always better to have an escape hatch and corresponding protocols in place.
Nothing to do with the medium, just when you have 100-1000s of systems which are backed up, some of these systems 10+ years old, testing the backups is simply not done in reality.
A good thing is all these viral security requirements slithering through the software supply chain (and backup is a part of security because ransomware) will force anyone who sells SaaS to consider it after the startup stages when they sell to enterprises.
For colocation you probably won't loose the data but the company you chose can still disconnect you. And it's not uncommon in certain countries that police will take the whole rack belonging to different customers when they do police raids against pirating, mainly because they're incompetent but also trying to find other violators.
At least if you own the hardware, you won't lose your data (except in extreme cases where the government takes it, but if this is the case you're screwed and data / service loss is the least of your worries).