To be clear, software update generally means to install software to update the macOS currently running on the Mac; update Catalina 10.15.1 to Catalina 10.15.7, for example.
To update your current macOS, click the Apple icon > About This Mac and then click Software Updates.... If there are any updates available for your Mac, they will be listed and you can apply them when you like.
A software upgrade is usually a generational step up to a newer macOS; upgrade from 10.13 High Sierra to 10.14 Mojave, for example, or from 10.15 Catalina to macOS 11 Big Sur.
❗️ Do NOT upgrade until you have made a Time Machine or other backup of your startup drive.
Learn How to Back up your Mac with Time Machine
How to Upgrade macOS:
The macOS version you can upgrade to depends on the year your Mac was released.
Click the (Apple) menu at the top left of your screen and choose About This Mac.
Check the Compatibility of your Mac with newer versions of macOS:
➡️ macOS 10.13 High Sierra is compatible with the Macs listed here
➡️ macOS 10.14 Mojave is compatible with the Macs listed here
➡️ macOS 10.15 Catalina is compatible with the Macs listed here
➡️ macOS 11 Big Sur is compatible with the Macs listed here
➡️ macOS 12 Monterey is compatible with the Macs listed here
❗️ – IMPORTANT – Your 32-bit apps won’t work in Catalina, Big Sur or Monterey.
https://support.apple.com/en-us/HT208436
Use this free utility to check the compatibility of your apps:
Go64: https://www.stclairsoft.com/Go64/
✅ - IF your Mac is compatible, then using Safari only, download the macOS upgrade installer app:
Click > High Sierra, Mojave, Catalina, Big Sur or Monterey.
Once downloaded, double-click the “Install macOS [version]” app in the Applications folder to begin the upgrade.