Rally Software Development Corp.

• Author: Peterson, Eric
• Position: Tech Startup of the Month - Company Profile

INITIAL lIGHTBULB

After meeting as graduate students at CU-Boulder in the late 1980s, Ryan Martens and Tim Miller went their separate ways, but soon reconnected in Colorado in 1993. Miller founded Avitek, a Boulder-based software developer, in 1995, and Martens worked for him through Avitek's 1999 acquisition by BEA Systems. Both left BEA in mid-2001.

While Miller took a 16-month sabbatical and circled the globe with his family on a sail-boat, Martens was laying the foundation for another startup, Rally Software Development. Martens said his strategy was shaped by two key factors: the rise of Web services--i.e. online application-to-application communication--and the lack of standardization in the software engineering process.

"There's been a trend in the software industry to change the way we develop software," said Martens, "and the recognition that developing software is much more of a creative, craftsman-like process than it is an assembly or construction process."

When Miller got back to Colorado from his sabbatical in late 2002, he joined Ryan as a board member and an angel investor. He became full-time CEO when Rally closed its first funding round in the fall of 2003, with Martens taking the title of president.

"There were really two focuses we had when we started," said Miller. "Ryan was deeply passionate about the problem and building great software. I was deeply passionate about building a sustainable, great company."

IN A NUTSHELL

Rally's products and services help clients manage "agile" software development, a term coined by the IT community in 2001 and detailed on the website, www.agilealliance.org.

Agile methods have demonstrated double the productivity of software development teams.

However, it's not an easy process to implement. "It requires a lot of feedback," explained Martens. "We run very short, time-boxed development cycles. Two weeks is pretty common." This timetable requires a lot of coordination and communication, which is where the 35-employee Rally comes in. Two-week cycles are "a big mind-shift" for IT professionals used to multi-month stages of development, said Martens. "You have to run everything in parallel. You have to have a highly functioning team. Because it's new, how you grow it into large organizations and how you grow it into distributed teams is something that's being mastered as...