What is difference Between Pure Sine wave and Modified Sine wave

The simple answer

This can get complicated but the easiest way to compare waveforms is like comparing them to petrol - a pure sine wave is like Optimax and a modified sine wave is like regular unleaded. Use a pure sine wave UPS on your expensive equipment (i.e. servers) and save the modified sine wave for cheap equipment (i.e. PC Workstations).

The detailed answer

When electricty is produced and delivered to your premises it arrives in as alternating current (AC) and as such has an alternating waveform (DC power does not have a waveform). When UPS were first invented they were designed to mimic and output this pure waveform after they cleaned up the original waveform. As time went on and everything started getting cheaper design engineers (and their bosses) discovered that they could save money and build a cheaper UPS by using less complicated UPS components (mainly the inverter) by having it output a sine wave that wasn't quite as perfect as the true version - it would look more like a series of steps rather than a curve. Since that time many manufactures have opted to produce modified or square wave UPS systems for low end equipment.

Using a modified sine wave UPS is generally not a problem for low end equipment as most switch mode power supplies like the ones found in your PC don't mind the square wave, even though they were designed to run on a pure sine wave. Problems start however when you start using them with more sensitive equipment. Anything with a transformer in it won't work to start with. Higher end systems may dislike the power supply and function (or disfunction) accordingly.

The other problem with simulated sine waves is that they can cause equipment they power to to run hotter than normal which can shorten the lifespan of the power supply. This is generally ok with a workstation or PC where the power supply only costs $50-60 but it will be concern in a server grade system where the replacement costs ( let alone the down time expenses) are much higher. The other drama with modified sine wave power inverter is that they are less efficient, as more energy is used up to deliver the same result. For example a 1kVA simulated sine wave UPS with the same battery as a 1kw pure sine wave power inverter will provide less backup time in the event of a power failure.