You need to ensure that VM3 meets the technical requirement.

The requirement is that VMs must be configured to enable per-folder quotas. VM3 already has the File and Storage Services role installed, but native NTFS quotas only apply per volume and per user; they cannot restrict the amount of data stored inside an individual folder. File Server Resource Manager (FSRM) is the Windows Server feature that adds true folder-level quota management, letting an administrator define hard or soft quota limits (and quota templates) scoped to specific folders rather than entire volumes, which is exactly the granularity the requirement calls for. Enhanced Storage is an unrelated feature that supports certain storage devices with enhanced storage access (IEEE 1667), Windows Standards-Based Storage Management provides SMI-S/WMI-based management of storage arrays and has nothing to do with folder-level quotas, and the iSNS Server service is used for discovery of iSCSI targets and initiators on a network, also unrelated to quota enforcement. None of those three alternatives provide any per-folder capacity restriction capability, so installing FSRM is the necessary first step before per-folder quotas can be configured on VM3.