Creating a quiesced snapshot failed because the create snapshot operation exceeded the time limit for holding off I/O in the frozen virtual machine

This issue may occur due to incorrect snapshot configuration files.
To fix the files:
  1. Connect to the ESX host or VirtualCenter through VMware Infrastructure Client.
  2. Select the virtual machine.
  3. Browse the datastores used by the virtual machine.  Find and rename the files with the following extensions:
    *.vmsn
    *.vmsd
  4. Retry the snapshot or backup operation.
  5. If the operations are successful, delete the renamed files.

Source : http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1006114

If this doesn’t help try the following:

When using the VSS or SYNC driver within a virtual machine, the tools attempt to quiesce all I/O (storage, memory, etc) within the virtual machine. Because the virtual machine has a MS iSCSI initiator LUN attached within it, the VSS or SYNC is unable to quiesce the guest operating system in the time allocated for the quiesce operation.

You have to disable the SYNC or VSS driver within the guest operating system to allow non-quiesced backups of the virtual machine.
Note: VMware snapshot operations (quiesced or non-quiesced) do not provide backups of any network attached storage mounted within the guest operating system (including iSCSI LUNs mounted via in-guest iSCSI software initiator, or CIFS/NFS share mounted within the guest operating system). For information on creating backups for these types of guest accessible storage, refer to your backup solution provider or storage hardware vendor for an appropriate solution.

Disabling VSS

This applies to virtual machines created on ESX 3.5 U2 or later.
To disable the VSS driver that is installed VMware tools in ESX 3.5 U2 and higher, use Add/Remove programs within the virtual machine.

Disabling SYNC

This applies to virtual machines created on ESX 3.5 U2 or prior.
To disable SYNC drivers:
  1. Open Device Manager, click View, and select Show hidden devices.
  2. Expand Non-Plug and Play Drivers.
  3. Right-click Sync Driver and select Disable.
  4. Click Yes twice to disable the SYNC driver and restart the virtual machine.
After removing the VSS and SYNC driver you do not have an application consistent backup of your guest operating system. Disabling the quiescing provides only a crash consistent backup of the virtual machine. This is similar to having a host powered off abruptly, then powering it back up, any data that was stored in memory is not saved to disk.
If you are running mission critical applications like Exchange, SQL, or Oracle, they require a separate backup process or workaround to ensure application level consistency.
vRanger Solution:
installing vRanger VSS within database server and doing the LAN-based backup instead of VCB back, and also enable “-noquiesce” switch for vRanger backup job. In this way, you should be able to take the consistency snapshot of database VM for backup.