Python: [BREAKING] Observability updates (#2782)

* fixes Python: Add env_file_path parameter to setup_observability() similar to AzureOpenAIChatClient
Fixes #2186

* WIP on updates using configure_azure_monitor

* improved setup and clarity

* fixed root .env.example

* revert changes

* updated files

* updated sample

* updated zero code

* test fixes and fixed links

* fix devui

* removed planning docs

* added enable method and updated readme and samples

* clarified docstring

* add return annotation

* updated naming

* update capatilized version

* updated readme and some fixes

* updated decorator name inline with the rest

* feedback from comments addressed

python/packages/devui/agent_framework_devui/__init__.py

@@ -177,9 +177,9 @@ def serve(
         import os
 
         # Only set if not already configured by user
-        if not os.environ.get("ENABLE_OTEL"):
-            os.environ["ENABLE_OTEL"] = "true"
-            logger.info("Set ENABLE_OTEL=true for tracing")
+        if not os.environ.get("ENABLE_INSTRUMENTATION"):
+            os.environ["ENABLE_INSTRUMENTATION"] = "true"
+            logger.info("Set ENABLE_INSTRUMENTATION=true for tracing")
 
         if not os.environ.get("ENABLE_SENSITIVE_DATA"):
             os.environ["ENABLE_SENSITIVE_DATA"] = "true"

python/packages/devui/agent_framework_devui/_executor.py

@@ -82,27 +82,23 @@ class AgentFrameworkExecutor:
 
     def _setup_agent_framework_tracing(self) -> None:
         """Set up Agent Framework's built-in tracing."""
-        # Configure Agent Framework tracing only if ENABLE_OTEL is set
-        if os.environ.get("ENABLE_OTEL"):
+        # Configure Agent Framework tracing only if ENABLE_INSTRUMENTATION is set
+        if os.environ.get("ENABLE_INSTRUMENTATION"):
             try:
-                from agent_framework.observability import OBSERVABILITY_SETTINGS, setup_observability
+                from agent_framework.observability import OBSERVABILITY_SETTINGS, configure_otel_providers
 
                 # Only configure if not already executed
                 if not OBSERVABILITY_SETTINGS._executed_setup:
-                    # Get OTLP endpoint from either custom or standard env var
-                    # This handles the case where env vars are set after ObservabilitySettings was imported
-                    otlp_endpoint = os.environ.get("OTLP_ENDPOINT") or os.environ.get("OTEL_EXPORTER_OTLP_ENDPOINT")
-
-                    # Pass the endpoint explicitly to setup_observability
+                    # Run the configure_otel_providers
                     # This ensures OTLP exporters are created even if env vars were set late
-                    setup_observability(enable_sensitive_data=True, otlp_endpoint=otlp_endpoint)
+                    configure_otel_providers(enable_sensitive_data=True)
                     logger.info("Enabled Agent Framework observability")
                 else:
                     logger.debug("Agent Framework observability already configured")
             except Exception as e:
                 logger.warning(f"Failed to enable Agent Framework observability: {e}")
         else:
-            logger.debug("ENABLE_OTEL not set, skipping observability setup")
+            logger.debug("ENABLE_INSTRUMENTATION not set, skipping observability setup")
 
     async def discover_entities(self) -> list[EntityInfo]:
         """Discover all available entities.

python/packages/devui/agent_framework_devui/_server.py

@@ -407,7 +407,7 @@ class DevServer:
                 framework="agent_framework",
                 runtime="python",  # Python DevUI backend
                 capabilities={
-                    "tracing": os.getenv("ENABLE_OTEL") == "true",
+                    "tracing": os.getenv("ENABLE_INSTRUMENTATION") == "true",
                     "openai_proxy": openai_executor.is_configured,
                     "deployment": True,  # Deployment feature is available
                 },