To answer this question, I would have to tell you what the term “service” literally means. Something is called an act of service when a person A is doing something for person B. Doing something could be anything as simple as cooking food for a guest to building software for business.
To give a better context, let’s compare the act of doing something with that of giving someone something. Example: A shopkeeper is giving you a box of pencils for the respective amount that you give him. In this case, “service” is the act of shopkeeper setting up a shop to sell goods to people. The shopkeeper is doing something for people, and consequently for himself too (by earning money).
But what about the goods sold to the customer? The goods, in this case, the box of pencils- is a “product”. A product is an output of service-based actions, which is delivered to its buyer at a specific cost.
Let’s put software development into this perspective. A business leader wants to have some kind of software to manage his organization. He does some research and hires a custom software development company to build his desired software.
In this case, the act of building the software for a business client is the “Service” in Software Development. This aspect includes everything from brainstorming about the software idea, conducting data analysis to understand software requirements, building prototypes, testing them and finally deploying an MVP.
The output of this service, i.e., the Software is the “Product” in this case. So to give a clear answer to your question, Service in Software Development refers to the entire process of building a Software, app/website. The other aspects of this service such as time, costs, value, etc., depend completely on the ideas of the company that needs the product and the vendor custom software development company’s expertise in building it for them.