That was a question on the minds of many solution providers who came to hear a panel discussion by industry leaders, economists and fellow solution providers at Monday's opening session at Breakaway XChange here.

The answer attendees received was somewhat mixed: Yes, most economists believe 2002 will be a better year than 2001, said CRN Director of Editorial Research John Roberts, but he added the typical reaction to a downturn doesn't seem to be taking place either.

Usually in a downturn, businesses will begin increasing their capital spending in anticipation of a recovery, but that doesn't appear to be happening now, Roberts said.

"A lot of enterprises are waiting it out," said Art Prifti, vice president and director of e-Business/Global Cash and Trade Technology at financial services giant Citibank, N.A., confirming the worst fears of many solution providers.

At the other end of the market, small businesses have allocated dollars for technology spending, but they're more likely to make their purchases on Internet access and related items such as e-mail filtering and virus protection, rather than on new operating systems or applications such as videoconferencing, said Steve Harper, president of Hutchinson, Kan.-based solution provider Network Management Group.

Yet in the midst of the gloom and doom, panel members pointed out a couple of bright spots on the horizon: e-business and managed services.

"We find there is a wonderful opportunity for e-business solutions," said Anne Smith, vice president, consultants and integrators at IBM Global Business Partners. Companies see e-business as a way to evolve their business models and a vehicle for increasing profits, she said.

The midmarket is a particularly attractive segment to target, Smith said.

Managed service providers can target solutions at the commoditized portions of companies' IT infrastructures, said Cable & Wireless a-Services Senior Director of Partnership Strategy Mark Thacker. These areas include e-mail, basic security and storage, he said.

"People are sick of upgrades," Thacker said.

People are also sick of the economic downturn, said panel moderator Charlie Humphries, CRN vice president and publishing director. "The best thing we can say about this year is that it's more than half over," he said.