BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is on the fast lane towards recovery with John Chen making some bold moves to turnaround the company. However, one analyst believes that investors are ignoring an important and promising segment, i.e. the software business.

BlackBerry Ltd Revenue From Software Could Double On Feb 1 [REPORT]

BlackBerry shift to software revenue model already underway

Peter Misek, a venture partner at DN Capital, in an interview with BNN said that he is amazed that everybody is still focused on the hardware segment. Misek added that Chen’s plan to double software revenue by the end of fiscal 2015, from $250 million to $500 million, is already moving forward.

Revenue from software dropped 12.5% or $8 million in the third-quarter of 2014 to $56 million, down from $64 million in the previous year, contributing around 4.7% of overall revenue. Chen already said that he will be making the necessary changes in going forward.

The free trial of BES10 called EZ Pass is expected to expire on Feb. 1 for 3.4 million subscribers. Misek said that when BlackBerry will withdraw the free service, around three to four times the number who they are currently charging are expected to begin paying, which could double the revenue.

Misek said, “It’s pretty exciting for them in that they are actually seeing traction among enterprise. As we talk to big CIOs, they are really showing up again.” Blackberry Enterprise Service offers secure service to the mobile phones across all platforms such as Android and the iOS. It allows the users to separate work and personal content. The company will release BES12 by the end of the month.

Shift from licensing to subscription base model

The Waterloo, Ontario-based company has posted some good news recently. Chen discussed a partnership with heads of Xiaomi Corp and Lenovo Group, the two biggest smartphone players in China. Last Friday, Ontario Teachers’ Pension Fund bought almost 7.8 million shares equaling a stake of around 1.6% valued at $84.5 million.

According to Chen, the company wants to shift its business from perpetual license to a subscription base. Although this will contribute less in the short-term, the subscription model will produce greater revenue in the future.

Analysts anticipate that a major contribution to BlackBerry’s growth will come from the upcoming BES12 solution.