Factory automation is a market dominated by leading European and Japanese companies, but Rockwell Automation (ROK -3.24%) isn't far behind. One way for it to close the gap is its partnership with U.S. industrial software company PTC (PTC -0.63%), and on Wednesday, PTC and Rockwell announced an "expansion and early extension" of their existing alliance.

The latest agreement means PTC's product life-cycle management (PLM) and software-as-a-service (SaaS) solutions will now be included, while PTC will offer Rockwell's virtual machinery simulation and testing software to its customers and partners.

A smart factory in operation.

Image source: Getty Images.

 It's an exciting development because PTC's PLM and SaaS offerings are often seen as enterprise-wide solutions -- as opposed to, say, Rockwell's manufacturing execution systems (MES), which can be just a factory-level solution. As such, the strengthening of the relationship implies more-comprehensive relationships with customers.

It also suggests customers will receive an added value from buying automation technology and software from Rockwell, and also industrial Internet of Things (IoT), augmented reality (AR), and PLM software solutions from PTC. It's a win-win scenario for the two U.S. companies as they both seek to encourage customers to adopt smart-factory technology.

After a $1 billion strategic equity investment in PTC in 2018, Rockwell aligned its smart-factory technologies and MES with PTC's Internet of Things and augmented-reality offerings.

The combination meant customers had a comprehensive digital offering. For example, a manufacturing plant could optimize its automated production processes with Rockwell's MES, while using PTC's IoT solutions to connect physical assets with the digital world in order to improve performance. Meanwhile, PTC's AR helps companies service automation equipment without engineers even being on the premises.