The problems with passwords are:
They are susceptible to guessing attacks.
There is no secure way to share them among a group.
They tend to proliferate and become hard to remember. You can use the same password for all items, but that reduces security.
The solution to this problem is identity-based security. The preceding section showed how you could allow specific users to edit protected worksheets without the worksheet password. The larger solution is to define workbook permissions based on the user’s identity.
Identity-based security solves the password problem because users maintain their own password—usually it’s the one they use to sign on to the network—and then their identity travels with them wherever they go on a network. You don’t have to set workbook passwords, share those with your workmates, and hope you don’t lose or forget them.
Excel provides identity-based security through Microsoft Information Rights Management (IRM). This new feature comes at a cost, however. In order to use IRM, you must have a Windows 2003 server running Microsoft Windows Rights Management (RM) Services on your network. If you don’t have that or if you want to share a workbook outside of your network, you can use Microsoft Passport identities instead of network identities.
IRM and the workbook permissions are available only with the Windows editions of Office 2003 or later.
There are some huge advantages to IRM over other types of document protection: