If a hosting company owns it's own data center the hosting company will have racks of servers dedicate to just backing up data on the other servers hard drives.
They have a program in place that automatically backs up all the servers data usually at night and saves that data including databases, emails, website files etc all to servers that are used for backups only.
They don't have a lot of ram and are only accessed by the servers to back up the data onto.
Then if the data needs restored the host just restores the data to another server or the same server once they get it back up and running.
Still you should never rely on your web host for backing up data even though they do.
Always back up your website files and databases often.
I take a complete backup of my blogs main files whenever I change something such as design etc or add plugins.
But I take a backup of the database every single time I publish a new post.
I keep a backup on my laptop, desktop, external hard drive and on a flash drive as well as in the cloud because I want to make sure that I never lose my data.
If I lose my website database I lose all that hard work that I did to write all those blog posts and I lose my monthly income.
My blog is my income that I live off of so it's important to keep backups of that data.