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.
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.