Frontline hurt in rival price fight

The distributor is nursing its wounds after competitors tried to steal its Computacenter contract

Frontline has managed to cling on to its Novell contract with Computacenter, worth #3 million in total, but only after being stung by a vicious pricing battle with rivals CHS, Ingram Micro and Persona.

The deal could hamper Frontline?s stated aim to build margin on major product lines.

Ingram Micro is understood to have led the attack on Frontline?s contract by bidding below cost in an attempt to steal the deal. One industry source said: ?Everyone went in below cost, but Ingram was mad ? they must have really saved their pennies to do it.?

Rival distributors were dismayed. Peter Rigby, CHS networking divisional manager, said: ?We are disappointed. The level of confidence in CHS may have been an issue as it is still just two months after having bought Merisel, but we look forward to going into tender next time.?

On Frontline?s Novell pricing in general, Rigby added: ?They?ve been dropping their pants right down to their knees because they?re concerned about market share.?

Ingram managing director Bill Gretton dismissed claims that his company had pitched a below-cost bid, but acknowledged that Computacenter was a prize deal. ?It?s a huge account ? by far and away the biggest one in the channel,? he said.

In addition to the Computacenter contract, Frontline has kept hold of orders with other top resellers Stream, Action Computer Supplies and Tplc.

James Morgan, Frontline?s Novell business manager, said: ?Pricing was at its fiercest, but because of our purchasing power, we were able to beat the others on price. January was the biggest month we?ve ever had.?

The contract is worth #500,000 a month for six months, but Morgan refused to go into financial details.