Flamingo’s Unorthodox Plan to Turn MSP Systems of Record into Loss Leaders
It involves giving away a stack of open source managed services software but charging for AI agents.
So if spending more on AI-powered automation is how big MSPs will goose margins in the years ahead, what can smaller MSPs with less data, fewer developers, and smaller budgets do to achieve the same objective?
How about spend less on software? That’s been Kaseya’s suggestion, certainly, since it began rolling out its Kaseya 365 product family just under two years ago, and fellow Miami-based software maker Flamingo has the same thought. Except that if Kaseya 365 is cheap, Flamingo’s OpenFrame suite is cheaper.
As in free.
Founded just over a year ago, Flamingo is a fledgling maker of MSP line-of-business software designed to increase margins by decreasing the top two expenses for smaller MSPs in particular: labor (which accounts for as much as 80% of an MSP’s costs) and what founder and CEO Michael Assraf (pictured) calls the “vendor tax” imposed by most managed service tool stacks. Flamingo’s goal is to banish that tax via open source software.
Its plan for achieving that goal has three components, beginning with OpenMSP, a no-fee community currently helping over 5,000 members collaboratively find, deploy, and implement open source management, ops, and security solutions. Of which there are way more than I, at least, had any clue. MSPs with sufficient skills and patience can integrate a suite of them on their own. MSPs without either can apply for beta access to OpenFrame, Flamingo’s pre-integrated suite.
Though that offering, like everything in the OpenMSP product directory, is free to download and use, Flamingo is not a charity. Backed by pre-seed funding from multiple venture capital firms, the company plans to make money on a cloud-based edition of OpenFrame equipped with Flamingo’s answer to the average MSP’s biggest expense, a pair of AI agents named Fae and Mingo that automate triage, scripting, and ticketing otherwise done by people. Pricing for that solution, which is scheduled to go GA at the end of the quarter, is still TBD.
Charging MSPs for that “system of action” software but not for the “system of record” software it automates is only one way Flamingo stands apart from competitors like ConnectWise, Kaseya, Halo, and NinjaOne. The company’s adamant resistance to cross-vendor integrations is another.
“We understand that might not be a great fit for every MSP,” Assraf says of Flamingo’s closed-door strategy, “but as time goes by, I hope we will prove to them that our stack is better.”
Initial evidence suggests many MSPs are willing to give Flamingo a chance to make that case. Some 150 MSPs are using the OpenFrame beta today and another 1,200 are waiting in line for a chance to give the software a test drive.