Short Answer: It Does
The other day after a visitor posted a concerned review when their Joomla site *and* the hosting companies main site went down, for quite some time. They were afraid the hosting company had packed up and left, which can happen.
I have been in this position more than once, not a good place to be. It is common for sites to go down for a few minutes but when your site is down for hours and the hosting companies main site is down and support is not replying to your requests a whole new level of concern sets in.
In this case I knew exactly where the user was coming from. I have a site hosted on the exact same server because my site down time matched up with what he described.
After thinking about this a few days I realized that most of the hosting companies we recommend are larger hosting companies (more than 100,000 accounts). I think we recommend them more because over time they provide good uptime, good customer service and you know they are not going away.
Hosting companies can be divided up into three categories, small, medium, and large. Not the most original categories but you know exactly what I am describing.
Small Hosting Companies
Small Joomla hosting companies are usually an individual who has purchased reseller space and is looking to make some money by providing very personal service. They can do a good job but typically you now rely on one single person, who sleeps and goes on vacation. This one person relies on the hosting company that they purchased the space from. This situation can work but it is somewhat risky. I typically avoid this type of hosting company.
The Good: You may know exactly who you are dealing with, can be a technically skilled person
The Bad: Usually just one person, they do not own the servers, support can be difficult
Conclusion: Usually best to avoid
Medium Hosting Companies
These companies can be a little more difficult to spot, you may or may not heard of them, and they will have a well established site with many support options. You are pretty safe with these companies but they generally do not have all of the emergency backup procedures in place and they are learning as they go. The prices will be competitive and they may hook you with a great deal. Medium sized companies will generally have their own severs, but not always. They will have around the clock support but the support can be outsourced and may not be the most reliable.
Two very well known companies fall into this category Rochen and SiteGround. We can 100% guarantee Rochen, they host the main Joomla site and I met the Owner Chris Adams at a Joomla Day. SiteGround on the other hand seems to be a good company that is well versed in SEO Check out alledia.com post of why they do so well. We do not think that siteground is going anywhere but they are not a top tier company yet.
The Good: May offer good deal, or appear like a reliable company
The Bad: May experience long downtimes, company could go out of business
Conclusion: Best to avoid medium sized hosting companies unless it is Rochen Hosting. They are reliable and host the main Joomla site.
Large Hosting Companies
These are the big boys, HostGator, BlueHost, 1&1, GoDaddy, etc. You most likely have heard of all of these companies and you know that they are not going out of business anytime soon. When it comes to large hosting companies many of them have a proprietary system or control panel. This is generally not the best for Joomla unless the control panel is cPanel. Both HostGator and BlueHost run cPanel.
The Good: They did not get to be huge by having lots of downtime. They know how to manage servers and support customers.
The Bad: May not always deal with the same tech, can be impersonal
Conclusion: Large Hosting companies are the way to go. Lots of support staff, strong business and support processes in place. Look at HostGator or BlueHost
Which Hosting Company to use?
It has been our personal experience that you want to go with a large hosting company that works with Joomla well. You will not go wrong with either HostGator or BlueHost.
For medium sized companies we like is Rochen and BuyHTTP. Rochen hosts the main Joomla Site. Hard to go wrong with the company that hosts the project main site.
