Error Message

"Error E3406 Unable to read file. Not enough server storage is available to process this command"

This error is not related to disk space and the issue may occur if the IRPStackSize registry entry on the remote system is set too low.

IRPStackSize represents the amount of stack locations allocated for the Input/Output Request Packet (IRP) stack in Microsoft operating systems. The value of your IRPStackSize influences the amount of allocated bits of memory your operating system can use to transport files or do any other sort of I/O operations within the system.

This article contains information about modifying the registry.
Before you modify the registry, make sure to create back up of the registry and ensure that you understand how to restore the registry if a problem may occur.
For more information about how to back up, restore, and edit the registry, please review the relevant Microsoft Knowledge Base articles on support.microsoft.com .

To resolve this issue, increase the value of the IRPStackSize registry entry. To do this, follow these steps:

1. Click Start, click Run, type regedit, and then click OK.
    
2. Locate and then click the following registry subkey:
   
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\LanmanServer\Parameters
   If the IRPStackSize entry is not present in this subkey, follow these steps:
   
   
   1. Click Edit, point to New, and then click DWORD Value.
       
   2. Type IRPStackSize, and then press ENTER.
      
      Note Type IRPStackSize exactly as it appears. The value name is case sensitive.
       
3. Click IRPStackSize, click Edit, and then click Modify.
    
4. In the Data Value box, type a larger value, and then click OK.
   
   Note Values may range from 0x1 to 0xC. These values are equivalent to 1 to 12 in decimal notation.

If the problem persists after you complete the previous procedure, increase the value of IRPStackSize more.

Safe Values

An IRPStackSize value of anywhere between 11 and 50 is considered safe. The normal value for the stack size is 15.

For more information refer to following Microsoft KB article:
https://support.microsoft.com/kb/106167

OR

If the issue is unresolved , try an individual drive backup instead of backing up the entire machine at once.