Amid Tight Race w/ Evernote, Microsoft’s OneNote Goes (Even More) Free, Adds Fresh Features

Microsoft Corp. (MSFT) is locked in a tight battle for dominance of the notetaking office software space.  Facing it is the agile Redwood City, Calif.-based Evernote Corp. who is backed by $290M USD in venture capital funding.  In its quest for dominance, Microsoft’s OneNote last week made the leap from “freemium” to fully free across all platforms.  The leap could tip the scales in what is current one of the most competitive niche software races.

I. Freemium Isn’t Free

Microsoft got off to an early start, launching in 2003.  However, it wasn’t until the advent of the smartphone and tablet that it truly took off.  Evernote, began in web app form, as an open beta in mid-2008.  Today the pair are neck-and-neck, though, in the app space.

Originally OneNote was offered as a standalone software package for the PC, priced at $58 USD.  Over time that price dropped and the software was slowly bundled into the great Microsoft Office bundle.  Barebones mobile client versions for Windows Phone (since 2010), Google Inc. (GOOG) Android OS devices (since Feb. 2012), and Apple, Inc. (AAPL) iPhone (since Jan. 2011), and Apple iPad (since Aug. 2012) also became available for free.

Eager to best Evernote and other smaller competitiors Microsoft had dropped hints in recent months that it would take the app fully free in the PC space.  In March Microsoft launched a free variant of OneNote for Windows and OS X computers.  That free app would be a key selling point of the 12-inch Surface Pro 3 hybrid laptop/tablet which aired last May.

Throughout 2013 and 2014 Microsoft also offered OneNote PC clients with premium features unlocked to college students, via is Office 365 academic giveaway.  Initially this program was limited to select partner institutions, but in September 2014 Microsoft extended it to cover all college students.

But until last week OneNote on the Mac or PC wasn’t completely free.  Microsoft charged OS X and Windows customers to unlock premium features, including page history/backtracking, Office file embedding, audio/video embed, audio recording search, and password protection on specific notebook pages.

Thus the mobile client was free, but the PC variant was freemium.  This put OneNote at a bit of a competitive disadvantage against Evernote, an app which might not have quite as many features in the PC space, but which was truly free across all platforms.
As noted by Paul Thurrott’s SuperSite for Windows, on Feb. 2011, an update came to the PC that effectively eliminated the paid offering by unlocking all the premium features in the free desktop clients.  As Microsoft puts it, “OneNote is now (even more) free!”

The app helps to level the playing field with Evernote, which is totally free to consumers both on the PC and on mobile devices.

It should be noted that while the consumer builds of OneNote are entirely free, enterprises will still have to pay for access, as usual with free PC software.

II. A Tight Race

To understand just how close the race between Evernote and OneNote is, I compiled some data from App Annie.

For both the Google Play store….

…and the iPad….

… it’s downright uncanny how close the OneNote and Evernote rankings are correlated.  On the iPhone Evernote has had a slight lead historically, but in the last couple months that gap has appeared to close, making this a tight race, as well:

According to these numbers, Microsoft is basically tied with Evernote in sales rank on the iPad and on Android devices.  But Evernote is a big ahead on the iPhone.  We were unable to obtains OS X App Store or Windows Store statistics, but we would guess that Microsoft leads by a modest margin on these platforms given that its apps have more reviews (nearly twice as many on the Windows Store, in fact).

III. New Features on the iPad — OCR and Handwriting Suppport

In addition to going free over the last couple weeks, Microsoft last week also looked to boost its iPad offering with new features.  These features included the addition of support for handwriting with a stylus on the iPad and support for optical character recognition (OCR) — a feature that converts pictures to text.

The feature works similarly to its implementation on the stylus-equipped Surface Pro 3 Windows tablet.

Microsoft also added support for optical character reconignition, which is handy for scanning in handwritten notes, data tables, or receipts.  The built-in OCR converts the image into raw text, which the user can then format to their liking.

It’s clear Microsoft is taking the competitive threat from Evernote seriously.  And it’s not just Evernote that it’s concerned about.  In the mobile and web app spaces theres’ a host of other smaller note-taking software bundles that are gaining in popularity.  Microsoft wants to act fast to make sure it solution bests not only Evernote, but smaller rivals as well, lest it fail to breakaway from the pack in this increasingly fragmented software niche.

Earlier in February Microsoft had added new features to its Office Lens companion app, allowing it to convert pictures of paper documents to PDF files and to autoclassify them.