Software update stopped working

I have a Mac Mini Server running my network. It handles DHCP, DNS and RADIUS authentication for the network as well as providing services such as Web Server, Time Machine and Software Update Server. It is running Lion Server.

I have just updated two Macs on the network to Mountain Lion. Since the update whenever I attempt to do a software update it starts up the App Store and then reports an error stating that update failed. Am I correct in assuming that the mechanism for software update changed with Mountain Lion so the previous settings which had all the Macs on the network point to the local Mac Server when looking for updates will no longer work.

Does this mean that I have to upgrade my Mac Server to get it all working again?