In VMM 2012, a service is a set of VMs configured and deployed together and managed as a single entity. For example, like the deployment of a three-tier business application or a frontend web application with SQL Server running in the background.
A service template provides the capability to separate the OS configuration from the application installation, leaving you with fewer OS images.
By using service templates, you will be able to leverage variations in capacity, easily adding or removing VMs needed to support the application.
Tip
It is the best practice to wrap even a single VM template into a service template as you, for example, scale it out.