Hard drives tend to fail because of one of these reasons:
The motor dies
The controller dies
The firmware becomes corrupted
The read -write heads become misaligned
The surface if the disk platters begin to degrade.
Mechanically, hard drives are not a really complicated device. Basically it is a metal case, with a motor mounted into the floor of it. This motor has a spindle on it similar to what your car has on its rear wheels. Instead of wheels and tires, this spindle has some small extremely thin discs, called platters attached. When the drive is turned on, the motor spins the disks. Above, in between, and below the platters there are little arms that travel across the surface of the disks using something called a read-write heads to read and write (get it?) little magnetic spots on the surface of the platter. Oh yeah, there is a magnet in there too.
All of this is controlled by a circuit board attached to the hard drive. This board has a small software program on it (referred to as firmware) that operates the hard drive. If you have an old hard drive, turn it over and look at where the cable connects to the drive. This connection is on the controller for the hard drive. If you touch any of the circuit board with your finger you can kill the drive by shorting the controller out with static electricity. Always handle a hard drive by the case, and take extreme care about static electricity.
When you send a hard drive to have the data recovered, the recovery company will hook it up and see if the hard drive will spin. If it will, then they will reload the firmware to the controller, and see if that works. If it doesn't, they may replace the controller board with a known good part and see if that will work.
Sometimes, especially if the drive has been dropped, the drive case has to be opened, and the read-write heads have to be re-aligned or replaced in order to recover the data stored on the drive. When all else fails, or if the drive will not spin, the drive will be disassembled, a new drive of the same model is also disassembled, and the platters that have the lost data are installed into the new drive housing in order to recover the data.
If the surface of the platters has begun to degrade, the chances of loosing data skyrocket. Always backup your data, and never keep irreplaceable files on a hard drive more than 2 years old.
These complications mean that data recovery is a very expensive procedure to have done, and the results are unpredictable.