The data connection issue with your security system is a different one, though: You’ll have the same problem with an old-school monitored security system. If someone cuts your phone line, an alarm will never go through to the monitoring company. Unless, of course, your security system has a cellular network failover…
The same applies to SmartThings: Connect your hub to a UPS and a router with integrated 4G failover to account for power and data connection loss. These days, both are available to the SOHO market.
And you are right: Even with 99% availability, there will be an average of 90 hours of outages every year. If that happens while your basement is flooding, then you’re out of luck. I’d argue, however, that for a consumer home automation system that would be acceptable for a great majority of users. For example, knowing that I would be properly alarmed 99% of the times my basement were flooding, would leave me satisfied.
The problem is that SmartThings currently does not mirror the reliability of the available cloud infrastructure. There is some sort of (albeit usually short-lived) backend issue roughly once a month, and things like a siren randomly going off is not an availability issue - That’s just annoying. Extending compatibility with other devices is great and all, but focusing on the core competencies is really mission critical if they want to become the de facto standard in modern home automation. Reliability is paramount, but blaming cloud infrastructure is just being lazy, when we really should be breathing down SmartThings’ neck to improve their backend reliability no matter the implementation details.
Again, in their defense, they have been promising a continued effort, and improvements have already been made!
On a separate note, you should definitely share some details about your generator / solar setup That sounds really awesome.