The ESO Very Large Telescope (VLT) started operations on Cerro Paranal (Chile) in April 1999 with one Unit Telescope and two science instruments. Seven years later it is still a growing facility consisting of four 8.2-m telescopes, three auxiliary telescopes for interferometry, and 11 science instruments. In addition two dedicated survey telescopes with wide-field cameras, VST and VISTA, a fourth auxiliary telescope, and several new instruments will become available in the coming months. Since the very beginning, VLT operations were planned to contain a substantial component of Service Mode observing, amounting to approximately 50% of the available time. The success of the full-scale implementation of Service Mode operations is reflected nowadays by the steady increase in its demand by the community, both in absolute terms and also relative to the demand in Visitor Mode, by the highly positive feedback received from the users, and also by the increasing flow of scientific results produced by programs that have exploited the unique advantages of flexible short-term scheduling. It is also fulfilling the requirement of creating a science archive and populating it with a data stream having through a quality control process. Here we review the current status of Service Mode observing at the VLT and the VLT Interferometer (VLTI), the challenges posed by its implementation on a wide variety of instrument modes, and its strong requirement of an integrated, end-to-end approach to operations planning with adequate tools and carefully defined policies and procedures. The experience of these seven years of VLT operations have led to a thorough exploration of operations paradigms that will be essential to the scientific success of ALMA and the extremely large optical telescopes in the coming decades.