It’s common for the new owners in a takeover to reduce costs. The reality is that is one of the major reasons a takeover happens–the new management feels they can reduce existing costs and find profitability in areas where there aren’t any. What does this mean to company survival?

First Data currently processes more than 75% of transactions in the United States and at least 50% of global credit card transactions. What is this going to mean if they experienced even a few minutes of downtime? Does anyone remember about five years ago when the satellite that powered gas stations went down, it wreaked havoc on America, as millions of people couldn’t pay at the pump for an entire day. Millions were late to work as they actually had to get out of their car and wait in line to pay for gas. While this didn’t relate to First Data, what’s going to happen when it does?

As part of its cost-cutting strategy, First Data may in fact be cutting out data centers from its existing platform in 2008. Even though the reduction in data centers could be completely benign, what happens when it results in downtime or even a complete system shutdown? Just imagine millions of millions of people across America, or even perhaps the world, not being able to pay for dinner, buy gas, or any number of things that we’ve grown accustomed to, for days on end. Thinking about taking cash from the ATM? Sorry, they control those too.

Even though most of us have come to think of First Data as nothing more than a credit card company, the fact is that at least three out of every four transactions we do everyday goes through First Data, just imagine for a second that you couldn’t make 3 out of 4 purchases today. Let’s just hope those at KKR are smart enough to realize the importance of uptime even if the difference between 99.9999% and 99.99% uptime costs ten times as much.