BlackBerry Ltd.’s transition from being primarily a maker of smartphones to a more-rounded enterprise software company focused on mobile remains on track, even as shareholders were left disappointed with its latest quarterly results.

Stil smarting from the stunning collapse of its smartphone business, the firm is hoping to revitalize itself with a laser-sharp focus on mobile device management software and niche handsets for the enterprise market.

And the company’s rising software revenues show the plan is slowly coming together, even as revenues from its smartphone sales continued to fall. BlackBerry said it booked revenues of $658m for first quarter of full year 2016, and reported a non-GAAP operating loss of $7m. It’s reliance on phones is there for all to see though – forty percent of its revenues came from the 1.1 million phones it sold in the quarter, and so clearly the decline in sales will comes as a disappointment. BlackBerry has actually launched three new phones in the last eight months, including the BlackBerry Classic, the BlackBerry Passport and the new, low-cost BlackBerry Leap. But these new devices haven’t tempted enterprises enough, with sales down from 1.3 million and 1.6 million devices in the two preceding quarters.

But software and technology licensing sales were a bright spot, with revenues rising from $74 million in the last quarter to $137 million now.

It’s a sign that BlackBerry’s plan to become an enterprise mobile software leader is bearing fruit. The company launched its main offering, BES12, last November, a platform that allows companies to manage the assortment of BlackBerry, Android and iPhone devices that their employees access the corporate network with.

Now, BlackBerry says it’s signed up 2,600 BES12 customers on contracts, including upgrades from earlier versions of the software. The company is setting a target of $500 million in software sales for this fiscal year, and is currently on track to achieve that.

Industry analysts had mixed opinions of BlackBerry’s first quarter performance.

“Certainly, the BlackBerry turnaround is not complete,” Jack Gold, an analyst at J. Gold Associates, told ComputerWorld. “Their aggressive target for software sales for the fiscal year may not be met, but they are moving in that direction. All in all, I’d say the progress they are making is slower than many had hoped for, but they are making progress nonetheless in moving from a primarily hardware-focused company of a few years ago to a software-focused one…”

Gold added that the doomsayer’s predictions of BlackBerry’s imminent demise were way off the mark, noting the company is close to profitability and has plenty of cash in the bank.

But Patrick Moorhead, an analyst at Moor Insights and Strategy, was less enthusiastic, although he too admitted the firm’s growing software revenues were a positive step.

“BlackBerry needs to exit the hardware market and get on Android or Windows Phone immediately,” Moorhead told ComputerWorld. “Few developers want to write to their BlackBerry ecosystem and that’s the kiss of death in the new world.”

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