Last edited 17 Nov 2019

Service provider

A service provider in the general sense is a vendor who supplies services, rather than actual products. In recent years, the term has been applied largely to companies in the fields of communications and technology, such as Internet service providers (ISPs), however, with the rise of servitisation, almost anything can now be supplied as a service.

The distinction between services and products can be quite blurred: there are few pure services and few pure products. Tradiationally, service providers typically provide activities which are of an intangible nature (such as consulting, legal and processing) and which are supplied as a direct consequence of a contract that exists between the service provider and the customer.

Such companies usually provide their services to customers on a subscription basis – say 12-, 18- or 24-month contracts. Mobile-phone companies may also be included in this category but in addition to providing the service of access to a mobile phone network, they generally also supply products – mobile phones.

Some firms, such as banks and insurance brokers, also provide a service but are not generally thought of as service providers.

Other types of service provider include:

Recently, there has been an increase in the provision of products as a 'service' such as 'software as a service', as well as cars, computers, lighting and so on. Buildings and infrastructure can also be provided as a service, as in the case of the Private Finance Initiative.

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