'upgradeability' is formed in English from the verb 'upgrade' + the productive noun-forming suffix '-ability' (from Latin '-abilitas' via Old French), where '-ability' denotes 'capacity or suitability'.

'upgrade' itself is a compound of 'up' + 'grade' (with 'grade' from Old French/grado and ultimately Latin 'gradus' meaning 'step'); the modern sense of 'upgrade' ('raise to a higher standard') arose in the 20th century, especially with technological usage, and '-ability' was appended to create 'upgradeability' (or variant 'upgradability').

Originally, 'grade' and 'upgrade' carried the idea of raising by a step; over time 'upgrade' broadened to mean improving or modernizing (especially hardware/software); 'upgradeability' thus means the capacity to receive such improvements.