©2014 rally software development...
TRANSCRIPT
©2014 Rally Software Development Corp
©2014 Rally Software Development Corp
This presentation contains “forward-looking” statements that are based on our management’s
beliefs and assumptions and on information currently available to management. Forward-looking
statements include information concerning our possible or assumed future results of operations,
business strategies, financing plans, competitive position, industry environment, potential growth
opportunities, potential market opportunities and the effects of competition.
Forward-looking statements include all statements that are not historical facts and can be
identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “intends,”
“may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and
the negatives of those terms. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Forward-looking statements represent our
management’s beliefs and assumptions only as of the date of this presentation. You should read
the prospectus, including the Risk Factors set forth therein and the documents that we have filed
as exhibits to the registration statement, of which the prospectus is a part, completely and with
the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements
publicly, or to update the reasons actual results could differ materially from those anticipated in
the forward-looking statements, even if new information becomes available in the future.
Safe Harbor / Forward Looking Statements
©2014 Rally Software Development Corp
RallyON! June 10th, 2014
Analyst Day
©2014 Rally Software Development Corp
Agenda
Agenda Jeff Cooper – VP - Finance
Welcome Ryan Martens – CTO / Founder
State of the Business Tim Miller – CEO
Sales Highlights Dan Patton – EVP – Sales
Marketing Angela Tucci – CMO
Insights Christine Hudson – Insights SM
Finance Jim Lejeal – CFO
Q&A
©2014 Rally Software Development Corp
Welcome
Presenter: Ryan Martens Date: June 10, 2014
©2014 Rally Software Development Corp
State of the Business
Presenter: Tim Miller Date: June 10, 2014
©2014 Rally Software Development Corp 2011 Standish Group Report
New projects started
with Agile
Projects Managed CAGR
29% 9%
22%
2010 2011 2012 2013 2014
9 11
13.4 16.3
20
Worldwide Market
All Data From The Standish Group Report “Chaos Manifesto – The Laws of Chaos and the Chaos 100 Best PM Practices - 2011
Percent of Projects Managed Using an Agile Methodology
©2014 Rally Software Development Corp
Worldwide Customers
Largest customer accounts for less than 4% of Revenue
©2014 Rally Software Development Corp
90 FY12
112 FY13
156 FY14
4 Regions
Worldwide Selling
Headcount data as of year-end.
©2014 Rally Software Development Corp
14% Revenue
~40% Users
Worldwide Users
Revenue Metric from Rally Q1 FY15 10Q Filing
International User Location Estimate based on Rally Usage Metrics – Q1 FY15, as reported in the Q1 FY15 CFO Commentary.
©2014 Rally Software Development Corp
Sales
Presenter: Dan Patton Date: June 10, 2014
©2014 Rally Software Development Corp
90 FY12
112 FY13
156 FY14
4 Regions
Worldwide Sales Footprint
Headcount data as of year-end.
©2014 Rally Software Development Corp
Marketing
Presenter: Angela T. Tucci Date: June 10, 2014
©2014 Rally Software Development Corp
Rally Marketing Scope
©2014 Rally Software Development Corp
Market Evolution
● Last 10 years, “Agile is something developers do”
● Now Agility is urgent business need
● “Business Agility” - ”the ability of an organization to
sense environmental change and respond efficiently
and effectively to that change” - Gartner
● Why?
Businesses need to rethink why, what and how they
build software because of new business model
opportunities, heightened competition and increased
customer expectations.
©2014 Rally Software Development Corp
Business Agility Defined
From: Traditional model
● Schedule-focused
● Yearly budgets
● Large upfront planning
● Track to plan
● Assign FTEs to projects
● Individual capacity
● Command and control
To: Business Agility model
● Value-focused
● Incremental funding
● Continuous steering
● Inspect value creation
● Flow features thru teams
● Team capacity
● Servant leadership
©2014 Rally Software Development Corp
Gartner Feedback
“The Biggest Impediment is Culture”
Executive leadership defines and models a company culture
so Business Agility requires executive sponsorship.
©2014 Rally Software Development Corp
What is a Rally Solution?
©2014 Rally Software Development Corp
Solutions Announced at RallyON!
Rally Insights Rally Program
Launch
Rally Portfolio
Scenario
Planning*
*Limited Beta
©2014 Rally Software Development Corp #RallyON14
Rally Unlimited Edition NOW INCLUDING Rally Unlimited Edition
for business agility
©2014 Rally Software Development Corp
Go-To-Market Approach
● Create demand in enterprise accounts
– Thought leadership events
– Industry focused messaging (e.g. regulatory, mobile)
– Online campaigns, web site trials and Flowdock
● Cultivate agile advocates for executive meetings
– Focus on business agility, ability to adapt or free up
operating budget for value-add activities
– Highlight Rally Insights or Rally Program Launch
– Propose an assessment type service
● Drive retention with valuable programs throughout the entire
customer journey, for example:
– Invite advocates to Rally planning events
– Rally Success Program ongoing post sale
©2014 Rally Software Development Corp
Application Lifecycle Market Size
* IDC Data, May 2014
©2014 Rally Software Development Corp
Thank you.
For more information, please visit
http://www.rallydev.com/rallyon/ or
#RallyON14
©2014 Rally Software Development Corp
Insights Intro
Presenter: Ryan Martens Date: June 10, 2014
©2014 Rally Software Development Corp
Featured Highlight: Insights
Presenter: Christine Hudson – Insights Solution Manager Date: June 10, 2014
©2014 Rally Software Development Corp
Deliver Improve
Plan
Business Agility - Building Blocks
©2014 Rally Software Development Corp
Why Do Customers Need Rally Insights?
Customer’s Business Problem:
● Our teams have adopted agile or are in the process of adopting agile,
and we now have tens to hundreds of agile teams.
● We have no way (or a few, painful ways) of knowing how well our
teams are performing and we need to make sure our agile teams are
doing everything they can to achieve maximum performance.
● Our management teams need to make sure our agile investment is
paying off.
©2014 Rally Software Development Corp
How are companies solving this
problem today?
● Custom reports in Excel, pulling data out of Rally and
other software and later into BusinessObjects, Tableau
● Benchmarking using SLIM-Metrics
● Subjective assessments, consultation by agile coaches
● Surveys: Internally created and/or agile consultant-
delivered surveys on agile maturity
©2014 Rally Software Development Corp
Rally Insights Solution
©2014 Rally Software Development Corp
Process Changes
©2014 Rally Software Development Corp
Software Automation
Rally Insights software included in Rally Unlimited Edition
● Now: Rally Insights (Beta) accessible by Rally customers
● Powerful, valuable differentiator to sell more Rally seats
©2014 Rally Software Development Corp
Behavioral Change ➔Rally Insights solution: Expert training and consulting services
◆Provided by subject matter experts
◆Scientific analysis and diagnostics, deep
dive into client data - and actionable advice
©2014 Rally Software Development Corp
Rally Insights provides
●UNIQUE Benchmarking, Data and Analytics
◆Rally Insights software provides industry benchmarking
◆based on non-attributable historical data from over 50,000 teams,
over 160,000 projects, and against roughly 13,000 active teams every
quarter.
◆based on unique technology, multi-tenant SaaS architecture
● UNIQUE Whole Solution
◆Process, Software Automation, Behavioral Change Support
Differentiation vs Competition
VersionOne and Atlassian
●NO benchmarking
●NOT multi-tenant SaaS architecture
©2014 Rally Software Development Corp
Rally Insights Roadmap
Q1 Q2 Q3 and Q4
2014 CALENDAR YEAR
Self-assessment and tracking
MVP/alpha Team/Program/etc
benchmarking Open Beta
Jan-Mar Apr-Jun Jul-Dec
Self-assessment and tracking Beta
Recommendations Engine
Research, mockups, evaluation, svcs
Recommendation Engine MVP/Alpha
LBAPI GA
RALLY
INSIGHTS
Visualization Toolkit / Custom
charts
MVP/alpha
Visualization Marketplace MVP/Alpha
(uses visualization toolkit)
Team/Program/etc benchmarking
GA
©2014 Rally Software Development Corp
Thank you.
For more information, please visit
http://www.rallydev.com/insights
#RallyON14
©2014 Rally Software Development Corp
Finance
Presenter: James M. Lejeal Date: June 10, 2014
©2014 Rally Software Development Corp
Key Metrics as of Q1 FY15
All data sourced from Q1 FY15 “CFO Commentary” available at investors.rallydev.com
* includes non-renewals, downgrades and upgrades Q1 FY15
225,963 paid seats
114% renewal rate*
Over 1,100 customers
41% Y/Y seat growth in top 15 customers
©2014 Rally Software Development Corp
Land & Expand – Top 15 Customers
From Q1 FY15 “CFO Commentary” available at investors.rallydev.com
First Order
Date
First Order
Seats
Total Seats as of
Q1 FY15
Year-over-Year
Seat Growth
Customer 1 March 2008 110 12,600 0%
Customer 2 June 2008 25 12,095 137%
Customer 3 May 2009 25 12,000 140%
Customer 4 September 2008 10 7,065 88%
Customer 5 June 2008 100 6,500 0%
Customer 6 January 2008 70 5,710 12%
Customer 7 April 2012 600 5,600 56%
Customer 8 October 2009 350 4,351 28%
Customer 9 September 2013 1,500 4,000 New cust.
Customer 10 September 2005 10 3,845 -13%
Customer 11 December 2010 25 3,010 -2%
Customer 12 July 2012 200 3,000 20%
Customer 13 December 2008 35 2,971 33%
Customer 14 December 2010 350 2,714 0%
Customer 15 July 2012 750 2,500 0%
Total 4,160 87,961 41%
©2014 Rally Software Development Corp
Customer Penetration
Top 15 average sourced from CFO Commentary
Top 100 average from Rally internal records.
Penetration estimates based Rally internal estimates.
Over
5,500 seats on average
Over
1,500 seats on average
Top 15 Top 100
~35% Average Penetration
~30% Average Penetration
©2014 Rally Software Development Corp
Win Loss
* As Reported during the Q1 FY15 Rally Software Earnings Call
Deals
Won
Dollars
Won 36%
63%
~85% Non-Competitive
~15% Competitive
©2014 Rally Software Development Corp
Subscription and Support Revenue
(000s)
Sourced from publicly filed quarterly and annual reports.
©2014 Rally Software Development Corp
Quarterly revenue
* Based on the mid-point of the revenue outlook provided during the Q1 Earnings Call
©2014 Rally Software Development Corp
FY15 Q2 and Full Year Outlook
* Outlook provided during the Q1 FY15 Rally Software Earnings Call
$20.2 -
$20.8
$87.0 -
$90.0
$(0.39) -
$(0.42)
$(1.31) -
$(1.36)
Revenue Non-GAAP EPS
Q2 Full Year Q2 Full Year
©2014 Rally Software Development Corp #RallyON14
Jan 31 Fiscal Year End
All items except Revenue exclude Stock-based compensation. Refer for reconciliation of non-GAAP financial measures
(1) Excludes one-time contra-expense for sub lease termination
Long Term Operating Model
(1)
©2014 Rally Software Development Corp
Q&A
©2014 Rally Software Development Corp
Appendix
©2014 Rally Software Development Corp #RallyON14
Jan 31 Fiscal Year End
Reconciliation of Non-GAAP Financial Measures
(1)