The game plan of Hong Kong-based Chinadotcom [CHINA] is to take established, proven, stable software developed for the US and European markets and introduce it to the emerging Chinese market. In doing so the local incumbent gains all the benefits of an advanced software solution without the costs associated with early product development, market penetration and establishment of the brand.
Chinadotcom’s software division CDC Software has completed its acquisition of CRM vendor Pivotal.
Chinadotcom plans to use Pivotal [PVTL] to bring marketing, sales, service and partner management capabilities to CDC Software’s existing ERP, SCM and Human Resources and Payroll offerings, which currently have limited CRM functionality.
It also gains 1,700 extra customers, bringing the total to 3,200 accounts worldwide. This figure includes Chinadotcom’s pending acquisition of ERP vendor Ross, which forms a ready pool for cross marketing opportunities. It plans to sell both an integrated suite of applications as well as standalone solutions.
Not only will Pivotal continue to develop its CRM products and services as well as building integration with other CDC Software products, the new owner also plans to keep the Pivotal management team who will continue to focus on the execution of the company’s strategy and operations. As a result, Pivotal has gained the financial stability it so desperately needed while maintaining the ability to do business in much the same way.
In addition, its choices have opened up considerably. It can continue to develop and sell the Pivotal solution in its existing markets, use CDC Software’s established distribution capability, and augment its own offshore capabilities in India through access to Chinadotcom’s cost-effective India and China-based offshore resources. Furthermore, Pivotal CEO Bo Manning has said the financial backing means it could also go on to make acquisitions designed to broaden the Pivotal product.
It almost looks like Pivotal has got the better deal, but the current phase of Chinadotcom and CDC’s strategy relies on maximizing the value of Pivotal, which means helping its sales in its native markets. This will enable the Chinese company to derive ongoing revenue to reinvest in its existing products and integration plans while revenues in China start to ramp up.
Chinadotcom and CDC are laying down a long-term strategy that has the potential to make them a strong force in the enterprise application sector in the main geographic regions of the world. Meanwhile, Pivotal will gain the support it needs to compete in its traditional markets, which suggests that this particular acquisition will not reduce choice, as most consolidation activities do.
This article is based on material originally published by ComputerWire