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I don't use a UPS for a power outage - I use it for a power "blink". Where the power turns off for second or so.

Yahoo will need the same, unless they know the grid where the are never does switchovers, and never gets hit by lighting.

Maybe they don't need a generator, but a UPS is essential.

How often does that happen?

What's the worst-case scenario if it does? Some people don't get served their web pages and have to hit reload?

I'm more concerned about Blue Waters. Power outages might not happen very often at Urbana-Champaign, but each one will annoy hundreds of scientists.

> How often does that happen?

During the stormy season lightning strikes happen every few days, although not all of them cause a blink that lasts long enough to reboot the computer.

The worst case scenario is the blink is able to do enough damage such as shutting off the computer and a hard drive being destroyed in the process, or even a power surge and the server being destroyed. (Though power surge equipment may be able to take care of the latter, a UPS would be helpful with the former).
If the system writes state at regular intervals, the scientists would only "lose" the computing time since the last state write.
Too scary for me. Who decides what is essential and non-essential? Is it worth risking thousands or millions of dollars worth of equipment sitting on the commercial power grid without conditioning? In case of natural disasters you have to accept the reality you could be without commercial power for a long period of time. Might work for Yahoo's architecture but I'd be more comfortable with a more traditional approach myself. If you have a somewhat power efficient data center a small UPS/generator is pretty cheap. I'm guessing they're doing this more for environmental concerns than cost.
You can have power conditioning without a UPS per se.

Most businesses, and I'm saying this as a former consultant, greatly overestimate what systems are truly critical. Each group within a large company wants to claim their systems are the most critical to the business, but in reality, very few systems need to be up 24x7.

From my personal experience; the actual question should be:

'Datacenters with UPS and generator that were never tested and never seem to work when power goes off?'