Updating vs. Upgrading

The terms "update" and "upgrade" are often used interchangeably, but have different meanings in software terminology:

• An update is a minor release (say, from 12.0 to 12.01) of a software product. An update may include minor software enhancements and address known issues, and it is usually free to current customers of the product. An update does not usually require that you perform a complete re-install of the software.
• An upgrade is a major release (say, from 12.0 to 12.1) of a software product that provides new features and improvements over an earlier version. An upgrade is not generally free, but current customers of the product are usually offered the upgrade for a reduced price (as opposed to the full price paid by new customers).  An upgrade usually requires a complete installation process.