Siebel Systems

(SEBL)

jumped Thursday as big institutional buyers responded to rumors that the software vendor has scored major wins in several lines of business, including national defense.

In very heavy trading, Siebel shares were recently up 78 cents, or 7.7%, to $10.89, a bit below the day's high of $11.02. By 12:30 p.m. EDT, nearly 16 million shares had been traded, double the average volume for a full day. Significantly, about 25% of the volume was made of block trades, an indicator that major buyers were behind the action.

"Historically, the magic entry point for the institutions on this stock has been around $10," said one trader. "At that point, any positive news will get them buying."

The impetus for the rush came Wednesday and Thursday. Some traders were apparently betting that Siebel could get a piece of national defense spending since aircraft builder

Lockheed Martin

(LMT) - Get Report

is a Siebel customer, and

Accenture

(ACN) - Get Report

which has done defense-related consulting, is a partner. Lockheed Martin and Accenture are two of three finalists for a

huge IT contract expected to be awarded by the Department of Homeland Security this week.

In a separate development, Jamie Friedman, analyst for research house Fulcrum Global Partners, wrote Wednesday that discussions with Siebel sales representatives indicate that the company has signed approximately 100 new customers for it's "hosted" software offerings in the second quarter. The recent wins follow another 229 new customers signed in the first quarter.

Unlike conventional software, hosted offerings are managed remotely by the vendor. Although hosted customer relationship management, or CRM, is less capable than conventional CRM software, it is much cheaper. Siebel has trailed hosted CRM leader Salesforce.com, which is expected to go public by summer.

Friedman also said that Siebel's second-quarter license revenue guidance now appears to have been conservative, according to feedback from customers and recent discussions with management. Fulcrum does not have an investment banking business.