No, you can upgrade.  Put in the disc and choose the Upgrade path (not Custom) to do an in-place upgrade to Windows 8.  You can do a clean install of Windows 8 over the top of Windows 7, but you don't have to.  You might consider running the Windows 8 readiness tool to find out if you will need additional drivers after the install or if your installed software may or may not have known issues with it.
We recently purchased 4 Inspiron 3847 to replace some XP machines being retired. They came with Windows 7 Pro installed, and a "License for Windows 8.1 Pro" Each came with a DVD labeled: Operating System, Already Installed on your computer,  Windows 8.1 Recovery Media for Windows 8.1 Products, 64 Bit I expected there would be some instructions on how to upgrade from 7 Pro to 8.1 Pro, either with the PC or online, but so far I haven't found anything. Is my only option to do a full install from the DVD? Any caveats I need to be aware of? Thanks so much!
Upgrade Inspiron 3847 from Win 7 Pro to Win 8.1 Pro