Congrats to my friends at Rally Software on the announcement that they’ve signed a definitive agreement to be acquired by CA Technologies for $480 million.
Part of the fun of having a blog for a long time is that it captures some of the history – in the moment – of what’s going on. For example, from a post in 2008 about Rally’s $16.85m financing, I riffed on the origins of the company.
Rally started out life as F4 Technologies. I remember my friend Ryan Martens sitting down with me and Chris Wand around 2001 and walking us through his idea for changing the how he approached managing the software development process. I can’t remember if Ryan used the word Agile at that time, but I remember scribbles on a white board that listed out all the different software that Ryan had used at BEA to manage his dev team and how maddening it was to try to integrate information in Word, Excel, Project, a dev workbench, a set of testing tools, and the support / QA system. Ryan had a vision for an integration web-based system to layer on top of all of this to help support and manage the software development process.
We weren’t the first investor in Rally. Ryan quickly raised about $400k of friends and family money. We offered Ryan space to work out of our office which he did for a year or so as he got things up and running. About a year after he got started, he was ready to raise a venture financing. At the same time, his partner at his previous company – Tim Miller – was doing an entrepreneur-in-residence at a local Boulder VC firm (Boulder Ventures). Ryan was encouraged to team up with Tim and shortly after that happened we co-led the first round VC financing with Boulder Ventures.
It has been a rocket ship from there. Tim, Ryan, and team have created a phenomenal company that is built on two trends that have picked up massive speed in the past few years: (1) Agile and (2) SaaS. In 2003 – while Agile was known – it was largely limited to ISVs and a few leading IT organizations. SaaS was beginning to be talked about as Salesforce.com’s success (and leverage from the SaaS model) became apparent.
Or if you want to go back to 2004 and 2005 when I was really learning about Agile, well before it had become a household name, you could read my posts Agile Software Development with SCRUM or Do You Develop Software For A Living? – Get Agile with Rally Release 5.
Or maybe dip into the 2006 and 2007 time frame when Rally was in an award cycle with my posts Rally’s New Financing and the E&Y Entrepreneur of the Year Award and Boulder 2007 Esprit Entrepreneur Awards.
Over the fast dozen years, Rally has gone from a raw startup to a 500 person public company. Tim Miller (CEO) and Ryan Martens (CTO, founder) have been working together from the start of the journey. Jim Lejeal, the CFO, was an original angel investor, then board member, and then CFO joining full time when the company was around 200 people.
It makes me so happy to reflect on my relationship with each of Tim, Ryan, and Jim. I first met Tim when he had just started Avitek (his previous company) working in the same office space as Andrew Currie, who had just started Email Publishing (my first angel investment in Boulder.) I met Ryan via Young Entrepreneurs Organization – we were both in the same YEO forum. And I was the seed investor, via Mobius, in Jim’s second company (Raindance, which he co-founded with Paul Berberian – CEO of Orbotix and Todd Vernon – CEO of VictorOps.) But more importantly, I’m close friends with each of them, even though my direct involvement in Rally ended about two years ago when the company went public.
There are hundreds of paragraphs I could write about all of the amazing things Rally Software has done for the Boulder Startup Community and for the extended city of Boulder. But I’ll end with one of them – the creation of the Entrepreneurs Foundation of Colorado (now Pledge 1%). The story starts in 2007 with the founding of EFCO, which Ryan and I spearheaded and had a huge punch line in 2013 when Rally Made a Gift of $1.3 Million To The Boulder Community after their IPO. Ryan continues to head up EFCO and is co-founder of Pledge 1%, which is the effort to take EFCO international.
To the extended Rally Software family past and present – congratulations. You’ve built something very special that is part of the long arc story of Boulder. And – to Tim and Ryan – thank you for letting me participate in your journey.
My post on How to Fix Obamacare generated plenty of feedback – some public and some via email. One of the emails reinforced the challenge of “traditional software development” vs. the new generation of “Agile software development.” I started experiencing, and understanding, agile in 2004 when I made an investment in Rally Software. At the time it was an idea in Ryan Martens brain; today it is a public company valued around $600 million, employing around 400 people, and pacing the world of agile software development.
The email I received described the challenge of a large organization when confronted with the kind of legacy systems – and traditional software development processes – that Obamacare is saddled with. The solution – an agile one – just reinforces the power of “throw it away and start over” as an approach in these situations. Enjoy the story and contemplate whether it applies to your organization.
I just read your post on Fixing the Obamacare site.
It reminds me of my current project at my day job. The backend infrastructure that handles all the Internet connectivity and services for a world-wide distributed technology that was built by a team of 150 engineers overseas. The infrastructure is extremely unreliable and since there’s no good auditability of the services, no one can say for sure, but estimates vary from a 5% to 25% failure rate of all jobs through the system. For three years management has been trying to fix the problem, and the fix is always “just around the corner”. It’s broken at every level, from the week-long deployment processes, the 50% failure rate for deploys, and the inability to scale the service.
I’ve been arguing for years to rebuild it from scratch using modern processes (agile), modern architecture (decoupled web services), and modern technology (rails), and everyone has said “it’s impossible and it’ll cost too much.”
I finally convinced my manager to give me and one other engineer two months to work on a rearchitecture effort in secret, even though our group has nothing to do with the actual web services.
Starting from basic use cases, we architected a new, decoupled system from scratch, and chose one component to implement from scratch. It corresponds roughly to 1/6 of the existing system.
In two months we were able to build a new service that:
Suddenly the impossible is not just possible, it’s the best path forward. We have management buy-in, and they want to do the same for the rest of the services.
But no amount of talking would have convinced them after three years of being entrenched in the same old ways of doing things. We just had to go build it to prove our point.
I love when companies I’m an investor in use acquisitions to build out their product line. In April Rally Software did one when they acquired AgileZen; yesterday they announced that Rally Software has acquired the ScrumAway iPhone app from Blue Hole Software.
Rally has re-released the product (previous a $15 download) as a free product called Rally for the iPhone that tightly integrates with the Rally SaaS-based Agile software lifecycle environment. If you are a Rally customer, this is a no-brainer app for you; if you aren’t a Rally customer but are an Agile development shop that also has a bunch of iPhone users, take a look at Rally’s products.
And – if you are an entrepreneur running a company that you think fits with any of the companies I’m an investor in, don’t ever hesitate to drop me an email to explore things.
How could you not fall in love with a company named AgileZen? Today, Rally Software – a company I’ve been an investor in since 2003 – announced that they have acquired AgileZen. If you are an Agile software development shop, or follow ALM, Rally just added Kanban to the mix.
This is the second acquisition Rally has made – the other was 6th Sense Analytics which they acquired at the beginning of 2009. If you follow this blog, you know that I’m a big fan of having established companies I’m an investor in buy smaller companies to help build out their product road map. I’m explicitly not a fan of rollups – I’ve had my share of investments in rollups that didn’t work. But I love targeted acquisitions that build out specific capabilities on an established company’s roadmap or add key people to the team. If you are looking for recent examples of this in my world, two others are NewsGator’s acquisition of Tomoye or Zynga’s acquisition of Serious Business.
Both companies have detailed blog posts about the deal – Welcome AgileZen! and We’ve joined Rally Software. If you are a company operating in one of our themes, don’t ever hesitate to reach out to me if you think you might fit with a company we’ve already invested in – you never know where the conversation might lead.
And congrats to both Rally and AgileZen – I’m excited for you guys.
I’ve watched (and participated) with excitement as Rally Software has helped move the notion of agile software development into the mainstream over the past few years. In addition to having the leading Agile application lifecycle management solutions, they are tireless educators and evangelizers for all things Agile. Today, over 1500 companies are doing over 33,000 projects using Rally’s SaaS-based ALM software.
Rally has just announced their Agile Success Tours. The first one is in Denver on 3/18/09 followed by similar events in LA on 3/26/09 and New York City on 4/02/09. They are free, but you have to register for them.
Each event is a half-day and is aimed at software and IT executives and managers who are being asked to deliver software faster and with fewer defects. The event will focus on how development teams can adopt Agile practices to achieve the real and measurable results that today’s economic climate demands: faster time-to-market, improved productivity, and fewer defects.
In addition, Rally has recently launched an Agile Blog that is packed with information, advice, and suggestions about Agile and how to implement it in your organization.
If you aren’t familiar with Rally or Agile, take a quick look at their five minute overview or try out the free version of Rally’s Community Edition for up to 10 users. Come join the Agile movement.