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/lab/gaia/agent_framework_lab_gaia/gaia.py

@@ -30,7 +30,6 @@ class GAIATelemetryConfig:
         self,
         enable_tracing: bool = False,
         otlp_endpoint: str | None = None,
-        applicationinsights_connection_string: str | None = None,
         trace_to_file: bool = False,
         file_path: str | None = None,
     ):
@@ -39,24 +38,27 @@ class GAIATelemetryConfig:
         Args:
             enable_tracing: Whether to enable OpenTelemetry tracing
             otlp_endpoint: OTLP endpoint for trace export
-            applicationinsights_connection_string: Azure Monitor connection string
             trace_to_file: Whether to export traces to local file
             file_path: Path for local file export (defaults to gaia_traces.json)
+
+        Note:
+            For Azure Monitor integration, configure using environment variables
+            (OTEL_EXPORTER_OTLP_ENDPOINT, etc.) or use AzureAIClient.configure_azure_monitor()
+            before creating the GAIA instance.
         """
         self.enable_tracing = enable_tracing
         self.otlp_endpoint = otlp_endpoint
-        self.applicationinsights_connection_string = applicationinsights_connection_string
         self.trace_to_file = trace_to_file
         self.file_path = file_path or "gaia_traces.json"
 
-    def setup_observability(self) -> None:
+    def configure_otel_providers(self) -> None:
         """Set up OpenTelemetry based on configuration."""
         if not self.enable_tracing:
             return
 
-        # If only file tracing is requested (no OTLP or Application Insights),
-        # skip the default setup_observability which adds console exporter
-        if self.trace_to_file and not self.otlp_endpoint and not self.applicationinsights_connection_string:
+        # If only file tracing is requested (no OTLP),
+        # skip the default configure_otel_providers which adds console exporter
+        if self.trace_to_file and not self.otlp_endpoint:
             # Set up minimal tracing with only file export
             from opentelemetry.sdk.trace import TracerProvider
             from opentelemetry.trace import set_tracer_provider
@@ -65,13 +67,17 @@ class GAIATelemetryConfig:
             set_tracer_provider(tracer_provider)
             self._setup_file_export()
         else:
-            # Use full observability setup for OTLP/AppInsights
-            from agent_framework.observability import setup_observability
+            # Use full observability setup for OTLP
+            from agent_framework.observability import configure_otel_providers
 
-            setup_observability(
+            # Set OTLP endpoint env var if provided
+            if self.otlp_endpoint:
+                import os
+
+                os.environ.setdefault("OTEL_EXPORTER_OTLP_ENDPOINT", self.otlp_endpoint)
+
+            configure_otel_providers(
                 enable_sensitive_data=True,  # Enable for detailed task traces
-                otlp_endpoint=self.otlp_endpoint,
-                applicationinsights_connection_string=self.applicationinsights_connection_string,
             )
 
             # Set up local file export if requested
@@ -333,7 +339,7 @@ class GAIA:
         self.telemetry_config = telemetry_config or GAIATelemetryConfig()
 
         # Set up telemetry
-        self.telemetry_config.setup_observability()
+        self.telemetry_config.configure_otel_providers()
 
         # Initialize tracer
         if self.telemetry_config.enable_tracing:

python/packages/lab/lightning/agent_framework_lab_lightning/__init__.py

@@ -22,13 +22,13 @@ class AgentFrameworkTracer(AgentOpsTracer):  # type: ignore
 
     def init(self) -> None:
         """Initialize the agent-framework-lab-lightning for training."""
-        OBSERVABILITY_SETTINGS.enable_otel = True
+        OBSERVABILITY_SETTINGS.enable_instrumentation = True
         super().init()
 
     def teardown(self) -> None:
         """Teardown the agent-framework-lab-lightning for training."""
         super().teardown()
-        OBSERVABILITY_SETTINGS.enable_otel = False
+        OBSERVABILITY_SETTINGS.enable_instrumentation = False
 
 
 __all__: list[str] = ["AgentFrameworkTracer"]