Code Rally is an IDE that allows users to write AI code in Java or JavaScript that can then race against other AIs simultaneously. It uses a backend of Cloudant NoSQL or DashDB SQL databases on Bluemix and the races are streamed in real-time. Code Rally demonstrates a hybrid cloud application with the server deployed to Bluemix on Cloud Foundry or Docker containers using WebSphere Liberty, while clients can be run locally. It utilizes technologies like REST, WebSockets, and JSON to enable polyglot programming and communication between components.