The business unit and the service unit are the two fundamental parties in the service management environment. The business units represent the service recipient side, which is responsible for the implementation of business processes. The service units are the service providers.
The two units don’t necessarily have to be part of the same organization or the same legal unit. ITIL draws a distinction between three types of business models for service providers:

• Type 1: Internal Service Provider
• Type 2: Shared Service Provider
• Type 3: External Service Provider

Although most aspects of service management apply for all types, it is important to differentiate between them. The domains of customers, contracts, competition, market, income and strategy have a slightly different meaning for the different types.