One or More Server Folders are Located on the System Hard Drive – Server 2012 Essentials

If you don’t use the ‘default’ shared folders in Server Essentials and are tired of getting the alert warning daily in your logs, you can remove those shared folders by following these instructions.

• In Explorer, stop sharing the folder
• Remove the registry entries for the shared folders in HKLM\Software\Microsoft\Windows Server\Storage Service\Folders
• Restart the service "Windows Server Essentials Storage Service"

That should stop the errors.