A method of and system for managing on-demand service offerings in a service delivery chain. The method comprises the steps of a service provider announcing upfront capacity pricing, an on-demand premium structure, and an on-demand exercise structure; a service distributor committing to upfront capacity and to units of on-demand options; and the service provider provisioning a number of resources to the collection of service distributors. Preferably, the upfront capacity pricing includes three components. A first component is a price structure for capacity or resources to be purchased for immediate use, a second component is an on-demand premium structure, and a third component is an on-demand usage fee structure.