Service Provider

A service provider is a vendor that provides IT solutions and/or services to end users and organizations. This broad term incorporates all IT businesses that provide products and solutions through services that are on-demand, pay per use or a hybrid delivery model. A service provider's delivery model generally differs from conventional IT product manufacturers or developers. Typically, a service provider does not require purchase of an IT product by a user or organization. Rather, a service provider builds, operates and manages these IT products, which are bundled and delivered as a service/solution. In turn, a customer accesses this type of solution from a service provider via several different sourcing models, such as a monthly or annual subscription fee. Examples of service providers include:

• Hosting service provider
• Cloud service provider
• Storage service provider
• Software as a Service (SaaS) provider

Types of Service Provider
There are three main types of service provider. While most aspects of service management apply equally to all types of service provider, other aspects such as customers, contracts, competition, market spaces, revenue and strategy take on different meanings depending on the specific type. The three types are:

• Type I – Internal Service Provider: An internal service provider that is embedded within a business unit. There may be several Type I service providers within an organization.
• Type II – Shared Services Unit: An internal service provider that provides shared IT services to more than one business unit.
• Type III –Eexternal Service Provider: A service provider that provides IT services to external customers