From LQWiki
A UPS is an abbreviation for an Uninteruptable Power Supply. It usually consists of a battery, a battery charger and a DC-AC inverter. UPS's sit between some powered device or devices (computer equipment) and the usual power supply (the wall outlet / power company) for that device.
When the usual power supply fails (the power goes out), the UPS takes over and provides power to the device. As soon as the power goes off, the UPS informs software running on the computer that the power is out and if the power doesn't come back on within a certain amount of time (depending on the size of the battery & load), the UPS informs the software and the computer shuts itself down to prevent data loss. Generally, UPS's are designed to only provide power to the device for a short period of time until the power comes back on.
More modern UPSes actually use the battery to constantly power the computer, and use line voltage to recharge the battery. This prevents fluctuations during the switch over.
It is slightly more important to use UPSes with Linux than with Windows computers. Most Linux filesystems buffer changes to RAM. This speeds performance, but can lead to filesystem problems if the machine is shutdown unexpectedly, before it has time to save the changes to the hard drive. This doesn't hurt journaling filesystems, such as ext3 as much.

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