It has become increasingly clear the last decades that the service sector constitutes the majority of employment and output in most industrial countries. While the traditional view on innovation and growth has emphasised the manufacturing industry, innovation within the service sector received little attention until the 1980 s despite the economic importance of the sector. Services play important roles in innovation processes throughout the economy, hence it is important to understand the nature of innovation in the service sector. This study provides empirical evidence on the importance of the innovation process from the research stadium to market launch within services. The purpose is to identify key factors central to the success, and, if turned around, the failure of service innovation. This thesis takes form of an embedded case study of an unsuccessful service developed in-house, from research to launch, by Det norske Veritas (DNV) to the global bunker fuel market. On the background of ten qualitative interviews, challenges occurring in the innovation process have been outlined. I explore the blurred lines between manufactured innovations and service innovations, asking to which degree innovation within these sectors differ. This approach turns the focus towards organisational innovation, discussing organisational factors surrounding the service itself as contributing causes to the outcome of a service. On the background of this case, it is argued that innovation in services differ to a degree from innovations in the manufacturing sector, but that several of the same factors apply. Especially organisational factors play an important role in service innovations, and if these are not in place, the likeliness of an innovation to succeed decrease. Studying the effect of user-involvement, management and knowledge transfer on service innovation, this thesis contributes to the integrative approach of service innovation. By exploring these effects on the performance of a data driven service, it also adds a new dimension to the characteristic issue of simultaneity in this type of hybrid service, opening up for increasing the gap between production and consumption within the service industry. Although there is no recipe for successful innovation, this thesis directs attention towards issues firms should be aware of when developing new services, to avoid failure and instead increasing the chances of enhanced firm performance.