Although a service provider can be a sub-unit of the organization that it serves, it is usually a third-party or outsourced supplier.
[citation needed] A more traditional term is service bureau.
IT professionals sometimes differentiate between service providers by categorizing them as type I, II, or III.
[1] The three service types are recognized by the IT industry although specifically defined by ITIL and the U.S. Telecommunications Act of 1996.
Type III SPs provide IT services to external customers and subsequently can be referred to as external service providers (ESPs)[2] which range from a full IT organization/service outsource via managed services or MSPs (managed service providers) to limited product feature delivery via ASPs (application service providers).