©2014 Rally Software Development...


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


RallyON! June 10th, 2014

Analyst Day


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


Welcome

Presenter: Ryan Martens Date: June 10, 2014


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


Worldwide Customers

Largest customer accounts for less than 4% of Revenue


90 FY12

112 FY13

156 FY14

4 Regions

Worldwide Selling

Headcount data as of year-end.


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.


Sales

Presenter: Dan Patton Date: June 10, 2014


90 FY12

112 FY13

156 FY14

4 Regions

Worldwide Sales Footprint

Headcount data as of year-end.


Marketing

Presenter: Angela T. Tucci Date: June 10, 2014


Rally Marketing Scope


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.


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


Gartner Feedback

“The Biggest Impediment is Culture”

Executive leadership defines and models a company culture

so Business Agility requires executive sponsorship.


What is a Rally Solution?


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


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


Application Lifecycle Market Size

* IDC Data, May 2014


Thank you.

For more information, please visit

http://www.rallydev.com/rallyon/ or

#RallyON14

http://www.rallydev.com/rallyon/


Insights Intro

Presenter: Ryan Martens Date: June 10, 2014


Featured Highlight: Insights

Presenter: Christine Hudson – Insights Solution Manager Date: June 10, 2014


Deliver Improve

Plan

Business Agility - Building Blocks


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.


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


Rally Insights Solution


Process Changes


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


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


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


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


Thank you.

For more information, please visit

http://www.rallydev.com/insights

#RallyON14

insights

insights


Finance

Presenter: James M. Lejeal Date: June 10, 2014


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


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%


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


Win Loss

* As Reported during the Q1 FY15 Rally Software Earnings Call

Deals

Won

Dollars

Won 36%

63%

~85% Non-Competitive

~15% Competitive


Subscription and Support Revenue

(000s)

Sourced from publicly filed quarterly and annual reports.


Quarterly revenue

* Based on the mid-point of the revenue outlook provided during the Q1 Earnings Call


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


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)


Q&A


Appendix


Jan 31 Fiscal Year End

Reconciliation of Non-GAAP Financial Measures

(1)

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