5 Things I Learned at Applied AI for Distributors 2026

We just got back from the Applied AI for Distributors conference in Chicago. Four of us attended. I gave a talk. Here's what I'm still thinking about.

1. Everyone said AI. Almost no one said why.

With 50 vendors in the room, you'd expect a lot of AI messaging. What I didn't expect was how hard it was to understand what most companies actually did. One major ERP vendor described themselves as "a technology company" — which, when your entire audience already knows who you are, tells them nothing. The vendors who cut through were the ones who led with the problem they solved, not the technology they used. In a sea of AI, AI is not a differentiator.

2. Legacy ERP is more constrained than I realized.

A few conversations left me floored. One distributor is running four instances of the same ERP and paying $1M a year just for API access. Another told me that if they want to run a SQL query, they have to write it, submit it to the ERP vendor for review, get approval, pay a fee, and then run it. Customers are still running ERPs on servers from the early 2000s. The friction isn't just slowing down AI adoption — it's slowing down everything.

3. The on-prem vs. cloud debate isn't really about the cloud.

Several distributors told me they didn't want to move to the cloud because it meant giving up control — relying on a vendor to schedule updates, add users, run queries. Their concern wasn't the technology. It was that moving to the cloud meant becoming more dependent on a vendor who was slow and expensive to work with. That's a trust problem, not a technology problem. And it's one the ERP industry created.

4. IT leaders are more forward-leaning than expected.

The assumption going in was that IT would be the cautious voice in the room. What I actually saw: IT leaders interviewing customers, pushing their organizations to make changes, asking sharp questions about architecture. The people I'd expected to be the blockers were often the most curious. The energy in the room was not "how do we protect what we have." It was "how do we move faster."

5. More engineers doesn't mean better software.

One vendor made a point of mentioning the size of their engineering team as a proxy for quality. In an era when AI is compressing what a small team can ship, headcount is not the metric. Customers are starting to figure this out. What they actually want to know: is this software getting better, faster? Is the company listening to what I need? Those are the questions that matter now.

---

After dozens of conversations, we've returned with a lot of conviction. The market is moving — but not uniformly. The distributors who are asking the right questions are going to quickly pull ahead. The ones waiting for their legacy ERP vendor to tell them what to do will quickly fall behind.