Relevance is twofold:

1) when we think of service innovation by vertical extension, then we are applying transaction cost economics.  We are deciding that we can avoid a holdup by providing (make) that service itself rather than from another provider (buy or ally).

2) when a service has a product element (either physical or digital) then again transact cost economics, is in play relating to that product.  Do you make/create yourself, or do you buy/license it, or create alliances to increase the tie between product provider and you as service provider.