This is kind of a weird issue. I already opened a service call with EMC support and since that the client is already de-supported, so didn't get much help. So I'm now redirecting my issue to the expert community forum of Networker Admins and users,
NetWare file server backup client with 1 single volume of 2TB with millions of small file, FULL and INC backup to disk fails, but when re-directed to tapes, it works or the backups completes. This is the error messages when the backup to disk fails:
1 retry attempted
SAVE.NLM: (TSAFS.NLM 6.53.3 266) This data set is in use and cannot be accessed at this time. :
SAVE.NLM: RPC error: RPC send operation failed. A network connection could not be established with the host.