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OVH's model is about being able to self finance the value of the servers over a longer period. Most of the resellers or 1 rack operators, hit Ebay find themselves some servers, stick it on their credit card and then look to get a fast return before they get stung by the card company for the high APR.
OVH on the other hand looks to write off the server over 3 to 5 years, like Hetzner. Plus because they are self assembling and buying mobos, memory, disks by the container load they are getting rock bottom pricing.
Add to that cheap power, cheap cooling and you can make it fly.
Do you have more details about that?
There was an interview with the head behind all admitting the advantages they had through taxation when he discussed their investment in Canada. I think they dont pay much tax in France for any foreign subsidy whatsoever. So their cost of capital is pretty low if you add the fact they use direct banking loans and internal cash flow.
Its many variables in play here. Financing, Tax Subsidies, Low Power and Cooling costs (e.g. BHS is near hydro plan), Engineering, Economies of Scale, Automation etc.
I think their story has all the elements of a Harvard Case Study.