Windows Server 2012 Essentials R2 backup

We have a new server with Windows Server 2012 R2 Essentials.  We are trying to use a WD My Passport Ultra drive to set up Windows Server Backup but the setup fails every time, trying to format the drive.  Microsoft suggested reformatting the drive, but that didn’t help.  It’s not a bad drive because another drive fails the same way.

We have been using these drives with Windows Server 2008 Standard with no problems.

Has anyone out there used a My Passport Ultra successfully with Windows server 2012 backup?  

If you know this will never work, what drive should I be using?

The unit is not yet supported on Windows Server.

Notwithstanding my statement that the Passport drive works fine for Windows Server 2008, Microsoft makes a big deal about using a USB hard drive for backing up Windows Server 2012 R2 with their built-in backup tool.  

Are there no 1 TB drives available at a reasonable price (<$150) that would work with Windows Server 2012 R2?  I am looking for a recommendation.  Thank you.