1. In information technology, a tier 2 vendor is a smaller and less well-known provider as compared to a tier 1 vendor. A tier 2 vendor is often also limited in its geographic coverage as well. As a consequence, a tier 2 vendor is generally regarded as a secondary source rather than the preferred source. Pricing and other terms may not be as favorable as with tier 1 vendors, but IT administrators may establish tier 2 relationships as "backup" vendors for situations when the preferred vendor may be unable to meet the organization's needs in an acceptable time frame.
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2. According to the Institute for Supply Management, tier 2 is a synonym for subcontractor. In this context, a tier 2 vendor would be a supplier for the tier 1 vendor that supplies goods or services to the customer.