A method for dynamic installation and activation of software packages in a distributed networking device. A master node provides a software package database that contains software packages for all nodes. It notifies a node that a software update is being requested, which examines the package identifiers and the dependencies and determines the running processes that will be affected by the update. The processes evaluate the effect that the update will have on their operation. If any of the processes determine that the update will degrade or have a negative impact on the operation of the node, the process will veto the update. If the master node receives no vetoes, it updates the node which installs and activates without interrupting the normal operation of the node.