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We deployed a SharePoint hosted app then used it for a while then we needed to upgrade it to be provider hosted app.

we used the same AppID and name with the new package then uploaded the package to the app catalog.

the old app in the site contents now has a note that there is a newer version and prompts to upgrade.

the upgrade fails with access denied even for site collection administrator.

is there really some permission issue or the upgrade can't be done

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You cannot change the app type using the update system. For example, you cannot change an app from SharePoint-hosted to provider-hosted with an update. - msdn

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