The CPU - Average CPU Usage alarm is activated when the average CPU utilization of the system exceeds a threshold. This value is taken over a specific number of background collections.
Sustained high CPU utilization can adversely effect the performance of the system, SQL Server and anything else using this server. Since this is a Windows-based metric, it can include CPU that was consumed by non-SQL Server processes.
When the alarm is raised
Connections to SQL Server:
If SQL Server is consuming most of the CPU, and your system supports many concurrent users, you might benefit from SQL Server's lightweight pooling option, which causes SQL Server sessions to be scheduled as fibers rather than threads. On some heavily-loaded systems, this can save a small amount of CPU. Ensure you test this properly, because on some systems it can actually increase SQL Server's CPU demands.
This option can be changed from the SQL Server | Configuration Drilldown. Changes to this option do not take effect until the SQL Server instance is stopped and restarted.
TIP: If these parameters are not displayed in the SQL Server | Configuration Drilldown | Configuration grid and you are connected to a SQL Server 2005 instance or later, turn the Show Advanced Options parameter on. You can do this from the Configuration grid.
Connections to Analysis Services:
Look at the Analysis Services | Activity Drilldown | Sessions page. Sort the Sessions grid by Last Command CPU Time to see which sessions are consuming the most CPU.