What is the BEST definition of an internal service?

This describes a supporting service between functions within the IT service provider itself, which is a narrower and more specific concept than the general definition of an internal service.

A service delivered by an outsourced provider to a customer is an external service, not an internal one, regardless of whether it is customer-facing.

A service delivered under a formal contract that enables a customer to achieve business outcomes more closely describes an external or contractual service, not the definition of an internal service.

ITIL defines an internal service as one delivered between departments or business units that belong to the same organization, distinguishing it from external services provided to outside customers. The key criterion is that both the provider and the consumer of the service exist within the same organizational boundary. This definition covers shared services, HR systems, or internal IT platforms used across business units.