A new version of a software or hardware product designed to replace an older version of the same product. Typically, software companies sell upgrades at a discount to prevent users from switching to other products. In most cases, you must prove you own an older version of the product to qualify for the upgrade price. In addition, the installation routines for upgrades often check to make sure that an older version is already installed on your computer; if not, you cannot install the upgrade.
In the 90s, software companies began offering competitive upgrades, which means that you can buy a program at a discount if you can prove that you own a competing program.