Using Excel is risky business. There are numerous examples of the risks shouldered by Excel usage documented at length at www.eusprig.org, a worldwide interest group focussed on this very issue.
One of the major reasons for the risks of Excel is the risks of having bad data. While this is a risk for any application (Remember the old principle of GIGO - Garbage in, Garbage out), this risk is very large in Excel, because Excel is largely populated by hand. Worse, there are no audit trails, as there are in enterprise applications. Once the data is entered in Excel, it just sits there and is emailed around.
No one knows who put the data in Excel, no one knows if someone changed it, no one knows if it is current.
A connected Excel can solve this problem in a big way. If Excel can be connected to data sources, and in a manner that does not need to user to learn complex SQL or XML, a single refresh can take away all the data risks for Excel. I presented a paper on this problem in the EuSpRIG conference last year. My co-author and I had suggested a mechanism of connecting Excel to back-end sources that can reduce the data risks of Excel to a large degree. We did build out most of what we had said. Check it out.
I heard that Microsoft is getting into the act and creating what is called as the "Excel Server" to mitigate some of the risks, and serve this very large user community. Not many details are out at this time though. It is slated for release sometime in the next few quarters.