Service Provider – What is it, definition and concept | 2022

A service provider is that professional or company that is dedicated to providing work in the form of a service to its clients. This, to satisfy a need.

That is, a service provider is a company or person that does not produce a good or output to market it. Instead, offer a labor or effort.

A simple example could be buying a piece of furniture, or asking a carpenter to fix the one we already have. In the first case, we would be buying a good, and in the second, we require a service.

Then there are professions and sectors of the economy in which companies and professionals can, at the same time, market a good or provide a service. This is the case of the carpenter in the example above.

What is a service provider and what is it for?

The figure of the service provider refers, as mentioned above, to those companies and professionals that provide a service to the client.

Service providers mostly serve to solve, on the one hand, a logistical problem, or else a problem linked to information and knowledge.

Regarding logistical problems, we can put the municipal or state water companies as an example. It makes no sense for each citizen to build their own water supply network autonomously, so the water supplier in this case is a service provider that solves a logistical problem.

On the other hand, with regard to information and knowledge, if a citizen needs legal services, it will be normal for them to hire a professional and not study the civil code and laws on their own.

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Key service providers

In the society we live in, there are certain actors that structure our way of life. Among these, service providers are undoubtedly one of them:

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To a greater or lesser extent, these services are essential to maintain the standard of living that we have. For example, the Internet has achieved it relatively recently.

Therefore, the companies that operate with this type of services will be companies that will have a high strategic level in any country, although each sector with its distances. It is not as urgent to guarantee the supply of water and electricity as it is to start the house from the roof and focus on supplying the Internet.

Examples of service providers

Some of the cases that can occur on a daily basis of service providers are:

  • Hydrocarbon stations: sale of gasoline, diesel, gas or LPG, among others.
  • Technology companies: cloud services, support, etc.
  • Consulting: legal, accounting, financial, real estate, etc.
  • Others: police, firefighters, judges, masseurs, hairdressers, etc.

If we stick to the main meaning of the term, a service provider will be what has been mentioned: large companies that are responsible for distributing a service widely. However, if we adopt the term in such a way that we take into account its literal meaning, a lawyer, police officer or hairdresser, also provides a service in this sense.

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