CloudWatch Alarm in AWS is a monitoring service that enables users to monitor and set alarms for various metrics. It allows users to set thresholds for their AWS resources, such as EC2 instances, S3 buckets, and EBS volumes. If the thresholds are breached, CloudWatch can automatically trigger notifications or automated actions through Amazon Simple Notification Service (SNS), Amazon Auto Scaling or AWS Lambda. This ensures that any potential issues with resources are quickly identified and corrective measures can be taken to ensure optimal performance. With CloudWatch Alarm in AWS, businesses have the ability to automate their infrastructure management process while ensuring maximum efficiency of their cloud environment.