It has long been assumed that US companies cannot dominate the software industry indefinitely. Sooner or later, goes the conventional wisdom, a giant will emerge from the east: perhaps Russia, maybe India, possibly even Japan or China.

So far, it has been only a theory. But when Hong Kong-based CDC Software recently elbowed aside Talisma and Onyx to buy mid-market customer relationship management (CRM) suite vendor Pivotal, more than a few commentators were prepared to suggest that a genuine candidate had been found.

CDC’s takeover of Pivotal was just the latest in a string of acquisitions funded by the proceeds of parent company Chinadotcom’s Nasdaq stock market flotation in 1999. When the dot-com bubble burst, Chinadotcom slashed costs at its web portal business and started re-investing the proceeds in enterprise software under the CDC Software banner.

A year ago, CDC was still relatively unknown outside its home market. Annual revenue was just $10 million. The mainstay of its business was implementing Sage’s Platinum for Windows, a US-developed enterprise software package for small and medium-sized businesses, as well as a payroll package developed to cater for the particular needs of the booming Chinese market.

But when all the pending acquisitions are completed – not only of Pivotal but also process manufacturing software supplier Ross Systems, order management specialist Industri Matematik (IMI) and others – CDC will boast an annual revenue run-rate of about $240 million.

CDC’s integration strategy is relatively simple. While some back office functions will be rationalised, the acquired companies will keep their management and brand identities. Only in areas where those brands are weak will the CDC Software name be used.

Revenue growth will mostly be driven by selling more aggressively into the Chinese market, where there is strong demand for manufacturing software in particular, says CDC Software managing director Steve Collins. At the same time, he says, the company will try to cross-sell the various software packages.

But managing growth will be tricky. And not all analysts believe the effort will be worthwhile. Bruce Richardson, senior vice president of research at analyst group AMR Research, believes that the Ross purchase makes sense, given the potential size of the market in China. But he is less convinced about the quality of many of the other acquisitions, particularly of Pivotal and IMI.

“The IMI deal makes no sense. That’s a company with zero momentum,” says Richardson. “Two things happened. First, SAP caught up with them in terms of functionality. Second was that the US management team all left and that basically crushed the company. As for Pivotal? I don’t get that one at all.”

Still, CDC has not finished yet. Next on the menu, according to Collins, is a discrete manufacturing software vendor to compliment Ross. (Possible candidates, in Richardson’s view, include Syspro and Geac-owned System21.) The new giant, it seems, has yet to finish its meal.