Problem
You’ve noticed that attempting to open Excel files from within Outlook 2016:
… fails with the following message:
Microsoft Excel cannot open or save any more documents because there is not enough available memory or disk space.
To make more memory available, close workbooks or programs you no longer need.
To free disk space, delete files you no longer need from the disk you are saving to.
Further troubleshooting of the issue shows that this only happens to Excel files received from external senders outside of the Exchange organization and files sent from internal users are fine because files received from external senders are blocked:
… while files from internal senders are not:
**Note that you can determine where the temporary Excel file is stored when you launch Outlook by navigating to the following registry key item:
HKEY_CURRENT_USERSOFTWAREMicrosoftOffice16.0outlookSecurity
OutlookSecureTempFolder
Reviewing forums and KB articles suggest the following workaround of disabling Enable Protected View for Outlook attachments:
While this solution works, it reduces the security protection for users because they will now open Excel Outlook attachments in non-protected mode.
Attempting to add the Outlook OutlookSecureTempFolder path as a Microsoft Office Trusted Location would not be a good solution because it also reduces security and Excel would not allow it either:
Solution
I wasn’t able to figure this out as all the forum posts I came across suggested the workaround so I opened up a ticket with Microsoft and the engineer eventually found the following KB:
Unable to open to Microsoft Word Documents or Excel Spreadsheets from Outlook 2013
https://support.microsoft.com/en-gb/help/3020607/unable-to-open-to-microsoft-word-documents-or-excel-spreadsheets-from
Reviewing the RDS server that had this problem revealed that the firewall was indeed disabled:
Re-enabling it and restarting the server corrected the problem.
