Check out the definition of "upgrade" in dictionary and you'll get something like these :

1) Raise (something) to a higher standard, in particular improve (equipment or machinery) by adding or replacing components.

2) An improved or more modern version of something, esp. a piece of computing equipment

3) software that provides better performance than an earlier version did

4) The term upgrade refers to the replacement of a product with a newer version of the same product. It is most often used in computing and consumer electronics, generally meaning a replacement of hardware, software or firmware with a newer or better version.

Hopes the above answer your question.