“A year of coding work. This is a million dollars worth of stuff we’re giving away” is how EY’s Global Innovation Leader for Blockchain, Paul Brody, describes one of EY’s latest moves to release 100% completely free software to the public.

Why would EY do this and why do I think that this is incredibly smart? Let’s take a look.

What EY Did

On May 31, 2019, EY released some open-source code on Github, a collaborative software development platform where developers from around the world can view code released from various parties and then either collaborate on it to help improve it or either just swipe it and use it for their own personal purposes however they see fit. The open-sourced code essentially equates to being free software that anyone can use and open-sourcing is very popular to help establish a development community around a particular project.

The released code in question is in the blockchain space, more specifically, it is a piece of code build on top of the Ethereum blockchain, the second largest blockchain in the world in terms of market cap according to Coinmarketcap at the time of writing.

CoinMarketCap Top 100 List

This won’t be an article on blockchain (though, as the following two links suggest, I do think it will have an impact on the audit as well as the bookkeeping world), but essentially on the Ethereum blockchain, any transaction that occurs is there for the public to see. Essentially, the Ethereum blockchain acts as one giant public ledger where all can see the transactions flowing through it.

EY recognized that some of their corporate clients, for a variety of reasons, wanted to leverage the power of the Ethereum blockchain but also wanted to do so in a private fashion, so they decided to build a tool that sits on top of the blockchain to help their clients do so. The name of this project was dubbed “Nightfall”.

But instead of charging their clients as any professional services firm would typically do, EY decided to dedicate about 200 blockchain developers on the project for about a year to work on the software and then decided to release all of their hard work to the world, for free. No constraints, no restrictions, no licenses. You can just grab the code here and do with it as you please.

So why is this smart? Because it helps attracts clients, drive thought leadership, bring in advisory revenues and increase the value of their advisory services. Let’s take a deeper look.

1) This is fantastic online advertising

When you have the online cryptocurrency reddit (an online message board) community praising the Big 4, like the user below, you have done an incredible job at infiltrating the depths of the internet from an online marketing perspective.

Reddit Comment

Clearly EY understands who they are targeting. Their clients interested in leveraging blockchain are usually quite involved in the cryptocurrency community. And cryptocurrency as a whole was basically born out of open source code. Essentially, Bitcoin, the most popular cryptocurrency on the planet, was released with open-source code. This is how this community likes to work, so by EY releasing their cryptocurrency code in this manner, it shows them as an organization that’s part of the community. People want to work with those that are in the same community.

Not only are the message boards talking about EY, but they received a ton of social media and blog exposure from this as well.

By releasing this code for free, EY is spoken about positively and is seen as a thought leader in the very community that they are targeting as clients. The code might have cost them millions, but it’s not inconceivable to think that their ROI on this will be much higher when all is said and done.

This is just great accounting firm marketing.

2) This software creates a springboard for advisory services

Some very tech savvy businesses out there might be able to take this code from EY and implement it 100% on their own knowing full well the implications and all of the corresponding angels. But there are a whole lot of other clients that may not be familiar with how blockchain may be applicable to their own business. Here is where EY can provide valuable advisory services to educate their clients and to then help to implement a solution using the free Nightfall tool that they had just developed.

So while the tool itself is free, the advice surrounding it is not. There are big bucks in that advice.

3) Free improvements to the code by the community

One of the benefits of open-source code is that you get people from around the world who believe in the project to participate for free. This means that while EY had originally released the code, they will get developers of all shapes and sizes pitching in along the way to make suggestions to improve the code for absolutely free.

As EY’s Global Innovation Leader for Blockchain puts it, “We want to maximize adoption and community involvement, we want people to adopt it, and adapt it, and improve it. If we retain ownership, people may not invest that much time and energy in something they might not control.”

The above shows that there is recognition that EY wants community participation to improve the code. Improvement of the code will not just benefit the community as a whole, but EY as well when it offers its advisory services surrounding the code (see point 2 above).

Since EY is going to be using this code to help some of their corporate clients, the value of their services increase as the usefulness of the code increases. It’s a brilliant strategy.

A Smart Tactic for the Digital Age

Let’s face it. EY didn’t release millions of dollars of code just to be nice guys. They released it because they had ulterior motives, just like any other profit-driven organization.

While I don’t often praise the Big 4, I really did like this particular move from EY. It demonstrates forward-thinking, excellent online marketing tactics and a strategy to not only help secure more advisory revenues but also increase the value of those advisory services. It’s a very smart strategy that shows an innovative approach to connecting with a market and to gain exposure. Firms out there can certainly learn from this.