For the on-premises infrastructure: - The fixed annual cost is 100,000.−Thevariablemaintenanceandsupportcostis20,000 annually. - Therefore, the total annual cost for the on-premises solution is: $textTotalAnnualCost=textFixedCost+textVariableCost=100,000+20,000=120,000−Over3years,thetotalcostbecomes:textTCO(On−Premises)=120,000times3=360,000Forthecloudsolution:−Themonthlyfeeis8,000, which translates to an annual cost of: $textAnnualCost=8,000times12=96,000−Over3years,thetotalcostforthecloudsolutionis:textTCO(Cloud)=96,000times3=288,000Now,comparingthetwoTCOs:−TCOforon−premises:360,000 - TCO for cloud: 288,000Thecloudsolutionismorecost−effective,withatotalcostofownershipof288,000 over 3 years, compared to $360,000 for the on-premises infrastructure. This analysis highlights the importance of evaluating both fixed and variable costs when considering cloud solutions versus traditional infrastructure, as well as the potential for significant savings in operational expenses through cloud adoption.