Service is provided through the application of service systems, which consist of clients and service providers that interact to co-produce value. However, because of the complexity of the management and modeling of people, technologies, knowledge, activities, processes, intentions, organizations, and wide range of types of service systems, formal representation and modeling of service systems is still in its initial stage. There is a need for a clearer understanding of service systems and the capabilities required for excellent service operation and continuous service innovation. The objectives of this study are three-fold: (1) to understand the required capabilities of service systems, (2) to examine service systems using different classifications, and (3) to explore the capabilities of service systems. This study establishes a comprehensive understanding of service systems, service components, different classifications of service systems, and required capabilities of service systems through qualitative media analysis and multiple case studies. The findings of this study are: (1) Service systems components are organized into four major parts: service provider, service client, service controller, and service supporting components. (2) Ten service systems classifications are constructed through the six classifying dimensions of customer participation, communication time, information richness, intimacy, customization, and delivery by ICT (information and communication technology). (3) Five service systems capabilities: integration, customization, technology optimizing, innovation, and learning, are proposed. (4) Six types of service systems are found when exploring the capabilities of service systems. Each type of service systems acts differently to acquire different capabilities. (5) The relationships between classifying dimensions and capabilities are delineated. Capabilities can be influenced by different classifying dimensions This study provides a structural framework for organizing business opportunities, as well as management implications for service systems management.