The impact of R&D to service business is increasing rapidly by the movement to service economies. The shift to focus on the services businesses, which is happening in manufacturing industries, affects their internal business processes, which include research organizations.In this paper, we study service research activities in a manufacturing enterprise, focusing on the advanced service research initiative, which was initiated as On Demand Innovation Services (ODIS) in 2003, as an exploratory research experiment in IBM. We propose services research model for value co-creation based on the ODIS experiment. We found that new knowledge is created through services activities, which are not created in a laboratory, traditional research activities. In addition, these are keys to the successful service projects. We focused on specific knowledge created during services research model for value co-creation, however, there are another kinds of knowledge also created. To understand and form the research base of service businesses and innovations, we should explore more on service innovation projects and understand critical factors, such as new knowledge created in a project, how they are created, and how the knowledge make the service research base more fruitful.