CDC's initial bid "had what we considered to be some holes in it," Pivotal spokesperson Larry Dennedy told CRMDaily.com. "We have discussed these issues with CDC in the meantime, and now we think this new proposal is worth consideration."

Pivotal's main objection to the initial offer had to do with details on how the deal would be structured. "This has been tightened up to the satisfaction of the special committee so it now can be considered," Dennedy said.

More Cash on the Table

The new offer is a proposal to acquire Pivotal either through an all-cash or a cash-and-stock transaction.

Under the terms of the agreement, CDC Software is offering to acquire all of the outstanding shares of Pivotal; shareholders can elect to receive, for each Pivotal share, either US$2 in cash, or $1 cash plus $1.14 worth of common shares of Chinadotcom corporation.

Superior Transaction

The new offer has been determined to be a 'superior transaction,' as defined under the current arrangement Pivotal has with the Oak Group, which is also in the process of trying to acquire the suddenly sought-after mid-market CRM vendor. In essence, the Oak Group has until Thursday, December 4th, to amend its existing offer to meet what CDC is putting on the table.

For the time being, says Dennedy, it is basically a matter of playing the waiting game. "We need to hear back from Oak."

For its part, Oak's offer is entirely cash. Also, as a venture-capital firm, it would take Pivotal private -- a competitive factor, as more and more companies vet prospective vendors with an eye toward financial viability.

Why CDC?

CDC definitely raised some eyebrows when it jumped into the tug-of-war over Pivotal, after Oak Partners and then Onyx submitted their respective tender offers.

The Hong Kong-based company says that the acquisition of Pivotal would be key to building its ERP suite bona fides, especially among manufacturers. "It is definitely a smart move for CDC," Aberdeen Group CRM vice president Denis Pombriant told CRMDaily.

"They would be buying pivotal for its business processes -- its ability to understand western business processes at a consumer or end-user level." Also, as many ERP vendors are finding, having CRM capabilities has become a competitive differentiator. "If you have ERP and SC feature sets -- well, that is great. It takes care of the back office," Pombriant said. "But it doesn't do a whole lot for getting a product to market." For CDC, "acquiring Pivotal "would be an important capability for them to address that market space more directly," he noted.

What It Says About CRM

Indeed the current tussle over Pivotal says a great deal about the CRM industry, in general, Pombriant continued.

"The conventional wisdom is that CRM does not work or is costly. But what we are seeing is that there are a lot people finally beginning to understand the value of CRM and the importance of having it as part of their I.T. offerings. These vendors are finding themselves at a competitive disadvantage by not having it."