It’s been quite a mystery as to why Prem Watsa owns so many shares of the beat-up BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY). The company has failed in its hardware business, but now it’s no longer making device on its own. This is a step in the right direction for the company, because it was getting destroyed in that market and could no longer compete with the products it was bringing to the market.

BlackBerry is going into a new direction with its business. It’s making the move from hardware to software, which is a direction I believe will be better for the long-term fundamentals of the stock as well as investors who are looking for a turnaround in the beaten-up business.

The management team realizes it must adapt to a changing market in order to stay in business, and one area they’re looking at is car connectivity, which has been dominated by Apple Inc. with CarPlay, and Alphabet Inc. with Android Auto.

BlackBerry recently signed a deal with Ford Motor Company to expand its use of the QNX auto technology. This will be the first time that the technology company will work directly with the automaker, as previously the QNX software was sold through a third party. Reports show that the relationship started over two years ago. Specifics regarding terms to the deal are not public right now, but Ford is reportedly going to include the new QNX technology in its new vehicles in the future.

The new software is in over 60 million vehicles, and this could be the start of a completely new and revived BlackBerry going forward if the QNX software receives positive reviews from the customers of Ford.

There’s no question that BlackBerry’s hardware business was a dead fish in the water, but as a software company it will be able to start to rally, which is something that has been hard for the company considering the fact that its phone business was miles behind the competition. The automotive software industry is a huge market that is just starting to take off.

What about the future?

If the QNX deal turns out to be a success, we can expect to see BlackBerry jump on other software development opportunities that arise later on. The Internet of Things market is a huge opportunity for software developers, and the costs of hardware production will no longer hinder the company’s financials.

Giving up on the independent device-manufacturing business was the best news this stock has had in a while. Investors were getting impatient with the poor feedback from its new devices, and now they can start feeling optimistic as the company knows how to produce great software.

Going forward, many partnerships with other companies may be in the pipeline, and we may see BlackBerry turn into a very successful producer of software. Billionaire investor Prem Watsa owns many shares of BlackBerry, and the reason why he owns it is starting to make more sense with the recent news.

If you’re a contrarian investor with a long-term time horizon of over five years, then BlackBerry might be your ticket to great returns, as the business is making a huge pivot–one that I believe will be an extremely positive one for long-term investors of the stock.

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Fool contributor Joey Frenette has no position in any stocks mentioned. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Apple, and Ford. Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of Alphabet (A shares), Alphabet (C shares), Apple, and Ford and has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple.