When you want to run a HA solution with Failover Cluster using ISCSI, you need to prepare the disk for use. You need to initialize and format the disks presented by the ISCSI target form one of the nodes in the cluster. You do this on only one node in the cluster.
1. In Server Manager select ‘Disk Management’. It should show the connected ISCSI-target disks as offline
2. Right click each of the drives and select the Online option to bring them online. Right click again and select Initialize Disk.
3. When the initialization is done, right click the unallocated space on a disk and select Create Simple Volume. Make the selections in the wizard to format the disk in the manner you want to formatted. Disks MUST be formatted as NTFS for use in a Failover Cluster. (You don’t need to assign a drive letter). Repeat these steps for every disk you want to use in your cluster.
4. Right click each of the created disks and select Offline
Congrats. You`re now done. In addition: also follow these steps when creating a Guest Cluster using ISCSI.