When we checked the logs we found the following error:
[REQUIRED] The nominated Exchange server for offline address book ‘New Offline Address List’ has been deleted. Nominate a valid server and restart setup.
In this case it was a SBS2003 to SBS2011 migration and on the SBS2003 server it did not have a valid offline address book specified. To resolve this you need to point the offline address book to valid server on the 2003 server.