Steam is an online distribution service for and community for video games. It is owned by Valve, which is a video game developer. Valve has created its own games, most notably the Half Life and Portal games.
Steam has competitors, mainly Origin, which is run by EA, and almost exclusive carries EA's games, such as The Sims, or Madden.
Other game developers, whether they are large development houses, or individual developers, then sign agreements with Steam, Origin, or others, to have them carry their game.
If anything the business model Steam uses is closer to that of Google's Play Store, or Apple's iTunes Store.