Businessmodel of Evernote

Customer Segments

Evernote has a segmented business model, with customer groups that have slightly different needs. The company targets its offerings at two segments:  consumers and businesses.

Value Proposition

Evernote offers five primary value propositions: accessibility, convenience, price, risk reduction, and brand/status.

The company creates accessibility by offering a wide variety of options. Its app enables users to create a note that can be in the form of a webpage excerpt, a full webpage, a section of formatted text, a handwritten “ink” note, a photograph, or a voice memo. Its app supports numerous operating system platforms, including Microsoft Windows, iOS, Android, OS X, Windows Phone, Windows Mobile, WebOS, Blackberry, Maemo, and Google Wave. Also, it has many uses beyond saving notes, as it has a portfolio of hundreds of apps from developers that extend its core products’ functionality.

The company creates convenience by making its product easy to use. Its platform enables users to synchronize their account across several devices (phone, tablets, PCs) and multiple apps.

The company offers a price value proposition. It provides a free basic version that comes with a monthly usage limit. Also, it often provides limited-time offers of discounts for student users.

The company reduces risk by maintaining high security standards. Its practices are as follows:

• Network Security – It delineates its network boundaries using a mix of firewalls, load balancers, and VPNs. These are used to control which services are exposed to the Internet. It also uses an on-demand mitigation service to protect against distributed denial of service (DDoS) attacks.
• Account Security – It never stores customers‘ passwords in plaintext. When it needs to securely store account passwords to authenticate clients, it use sPBKDF2 (Password Based Key Derivation Function 2) with a specific salt for each credential. It also offers two-step verification (2SV) for all accounts.
• E-mail Security – It enables users to create notes in their accounts by sending e-mails to an Evernote e-mail address; all e-mails sent are scanned using a commercial anti-virus scanning engine.
• Product Security – It uses an application security program to improve code security hygiene and regularly assess its service for common application security problems such as CSRF, URL redirection, injection attacks (XSS, SQLi), clickjacking, and session management.
• Transport Encyption – It uses standard encryption methods to protect data in transit (transport layer seucrity or secure socket layer technology). It also supports HTTP Strict Transport Security (HSTS). Beyond these steps, Evernote also publishes an annual “Transparency Report“ that provides information on third-party (e.g., government agencies) requests for user information in the past year. Specifically, it identifies the number and types of requests, which can be criminal or civil in nature.

The company has established a strong brand due to its success. It bills itself as the top repository of unstructured data, serving more than 200 million users and 20,000 companies worldwide. It claims that 35% of first-time users become regular customers and 22% become paid-users within their first three years. Lastly, it has won honors such as the “People’s Voice“ Webby Award in 2010.

Channels

Evernote’s main channel for consumers is its website. It utilizes a business sales team to reach out to potential business customers. The company promotes its offering through its social media pages, e-mail marketing, its blog, and participation in conferences.

Customer Relationships

Evernote’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a “Help and Learning” section that includes tips, tutorials, product downloads, and answers to frequently asked questions.

Despite this orientation, there is also a personal assistance component. The company provides access to Evernote Certified Consultants (ECCs), individuals with comprehensive training in the use of its products. They provide in-person and virtual training and offer guidance on best practices. There is also a community element in the form of a peer forum where customers can interact.

Key Activities

Evernote’s business model entails designing and developing software for its customers.

Key Partners

Evernote incorporates software from third-party suppliers into its product. Specific partners are as follows: THRIFT, Log4Net, LibXML, LibPCRE, Webkit, Chromium, and TinyMCE.

Evernote also maintains alliances with firms that produce software and hardware designed to work with its product, for the purpose of enhancing customer experience. Specific partners and their products are:  Fujitsu (ScanSnap Evernote Edition), Moleskine (Evernote Notebooks), and Adonit (JotScript 2 Evernote Edition).

Lastly, Evernote recruits avid fans of its product to serve as “Evernote Community Leaders”, individuals who promote the product to members of their community, online and offline. They undergo comprehensive training and receive tools and resources to assist them with this activity. Benefits of the program include a badge, product updates, and access to a private discussion forum.

Key Resources

Evernote’s main resources are its human resources, who include the engineering employees that design and develop its software, the business sales staff members that promote it, the consulting staff members that offer advisory services, and the customer service employees that offer support.

As a startup it has relied heavily on funding from outside sources, raising $205 million from 14 investors as of November 2014.

Cost Structure

Evernote has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions.

Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are cost of services, a variable cost, and customer support, a fixed cost.

Revenue Streams

Evernote has one revenue stream: revenues it generates from the subscription fees it charges for annual access to its software. It offers the following plans:

• Evernote Plus – Offers 1 GB of new uploads per month and costs $34.99 per year
• Evernote Premium – Offers 10 GB of new uploads per month and costs $69.99 per year