'provider-managed' originates from the combination of 'provider' and 'managed', where 'provider' refers to an entity that supplies services and 'managed' refers to the act of overseeing or controlling.

The term 'provider-managed' evolved from the increasing trend of outsourcing services to specialized companies, particularly in the IT sector.

Initially, it referred to any service managed by an external provider, but now it is often used in the context of IT and telecommunications services.