https://www.xperience-group.com/news-item/is-my-crm-data-backed-up/
The short answer is – YES. More importantly, how easy is it to restore if something goes wrong.
Part of the the license you pay for each user will give you access to the Dataverse database where all your and your company’s CRM data is stored. Microsoft will back this data up to a separately managed area which is managed outside your allocated dataverse storage space.
System backups on Production environments are continuous. Meaning, any small changes is copied to the backup environment as it happens. Think of the backup of a timestamp on all changes. It is stored for 28 days.
Additional your CRM and Power Platform administrator can initiate a manual backup. This is typically done when a large change or upgrade is scheduled in your environment.
Microsoft use the Azure SQL Database technology for this. Refer to Automated Backups.
Development and Trial environments are also backed up continuously but only kept for 7 days.
As the backup is continuous, you can request a restore from any point in time in the last 28 days. The important thing to note here is that you cannot restore parts of the system. I.e. only the Opportunity table OR only my Contact records. The whole database with all users changes are reverted to the chosen restore time.
For additional security, if the administrator restores a Production environment, it will firstly be set as a Sandbox before a very specific action, by the administrator, is done to overwrite your Production environment.
Certainly, there are alternative solutions which would allow for more granular extraction and/or restoring of backup data. There are Keepit, AvePoint, Veeam, to name just a few. Each would be a paid for service and have its own specific features.
Generally, in the SMB market, customers do not need to or choose not to have this additional expenditure and wholly on Microsoft backups.
Additional information on the Microsoft learn page: Backup and restore environments
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