Python: [BREAKING] Observability updates

[eavanvalkenburg]

Motivation and Context

Made the setup a lot simpler, and more compatible:

• simplified the env variables in ObservabilitySettings
• adjusted the logic for enabled and sensitive data
• uses the OTEL standard env variables to create exporters fully dynamically
• removed gRPC exporter dependency, instead you should install the ones you need (gRPC, http or others like azure monitor), tries to import with a proper message
• adjusted sample and readme to reflect changes, the idea is now, that if you need complex setup (like with configure_azure_monitor) that you run that, and then only call setup_observability when you want to programmatically ensure that the code paths that emit traces, metrics, etc. are enabled. if you set the right env variables, then that is not needed.

Description

Closes:

• Python: setup_observability does not support Application Insights QuickPulse aka Live Metrics #2649
• Python: ApplicationInsights agent span has incorrect token numbers #1320
• Python: Bug in logging to App Insights #2795

Contribution Checklist

• The code builds clean without any errors or warnings
• The PR follows the Contribution Guidelines
• All unit tests pass, and I have added new tests where possible
• Is this a breaking change? If yes, add "[BREAKING]" prefix to the title of the PR.

[markwallace-microsoft]

Python Test Coverage Report •

File	Stmts	Miss	Cover	Missing
packages/a2a/agent_framework_a2a
_agent.py	139	7	94%	354–355, 392–393, 422–424
packages/ag-ui/agent_framework_ag_ui
_client.py	136	10	92%	78–81, 84, 217, 247, 398–400
packages/anthropic/agent_framework_anthropic
_chat_client.py	261	101	61%	234, 255, 293, 297–298, 304–305, 309, 339–340, 349, 351–352, 354, 371–372, 403, 418, 422–423, 469–471, 473, 483–484, 490–492, 496–498, 502–505, 516, 518, 546–548, 558–560, 568, 573–574, 582–584, 587, 595–597, 605–608, 617–628, 631–638, 644–651, 654–664, 667–670
packages/azure-ai/agent_framework_azure_ai
_chat_client.py	434	81	81%	298, 566–567, 569, 572, 575, 578–583, 586, 588, 596, 608–610, 614, 617–618, 626–629, 639, 647–650, 652–653, 655–656, 663, 671–672, 680–681, 686–687, 691–698, 703–704, 712, 718, 726–728, 731, 753–754, 816, 831, 843–847, 874–876, 879–880, 938–943, 964, 1005, 1014, 1040
_client.py	171	37	78%	220–223, 228, 231–234, 239, 242–243, 246, 253, 292, 294–297, 299, 436–439, 443, 445–446, 448–456, 458
packages/core/agent_framework
_agents.py	291	52	82%	329, 390–392, 438, 492, 510, 672, 853, 856–858, 994–997, 999, 1002–1004, 1100, 1141, 1143, 1152–1157, 1163, 1165, 1175–1176, 1183, 1185–1186, 1194–1198, 1206–1207, 1209, 1214, 1216, 1250, 1295–1296, 1298, 1300, 1311
_clients.py	100	9	91%	267, 383, 431–434, 478, 799, 801
_memory.py	69	15	78%	119, 140, 158, 168, 185, 255, 259, 287–288, 291–292, 294, 310–312
_serialization.py	105	10	90%	335, 347–348, 357, 516, 532, 542, 554, 610, 613
_types.py	952	101	89%	130–131, 149–150, 287, 289, 296, 315, 355, 401–402, 438, 588, 702–703, 705, 730, 737, 754–756, 829, 834–835, 837, 844–845, 847, 869, 876, 879–881, 886–887, 893–895, 1019, 1106–1109, 1117–1118, 1209, 1390, 1396, 1640–1642, 1648–1649, 1951, 1956, 1960, 1964, 2142–2144, 2156, 2207–2211, 2221, 2226, 2685, 2771–2773, 2846, 2857–2858, 3032, 3036, 3048–3050, 3151–3153, 3155–3157, 3160, 3164, 3167, 3172, 3217–3218, 3225–3226, 3260–3262, 3277, 3293, 3321, 3328
observability.py	645	156	75%	244, 312–317, 319, 321–322, 324, 326–328, 331–333, 338–339, 345–346, 352–353, 360, 362–364, 367–369, 374–375, 381–382, 388–389, 396, 433, 436, 439–441, 444, 447–448, 451–453, 455–457, 460, 547, 549, 631, 649–650, 652, 655, 663–664, 667–670, 672, 675–677, 680–681, 694–700, 702–711, 714–718, 721–724, 726–729, 732–733, 741, 842, 844, 869–871, 993, 995, 999–1004, 1006, 1009–1013, 1015, 1285, 1365–1367, 1439–1441, 1614, 1622, 1626, 1630, 1636, 1638, 1640, 1648, 1658, 1686–1687, 1700–1703, 1717, 1719, 1726, 1742, 1745, 1805, 1821, 1825, 1959, 1961
packages/core/agent_framework/azure
_chat_client.py	58	4	93%	166, 168, 181–182
_responses_client.py	28	2	92%	100, 123
packages/core/agent_framework/openai
_assistants_client.py	209	29	86%	179, 192, 195, 201–202, 205, 208, 211–212, 223, 248, 250, 252, 254, 256, 259, 262, 265, 269, 280, 365, 402, 438, 467–470, 521, 538
_chat_client.py	234	43	81%	110–111, 115, 133, 143–144, 146, 157, 171, 173–176, 185, 197, 233, 264, 269–283, 290–292, 367, 374, 376, 378, 396–397, 403, 419
_responses_client.py	484	94	80%	98, 144, 151–152, 155–156, 161–162, 165, 172, 191, 198, 201–208, 210, 215, 221, 225, 240, 243–244, 246, 273, 303, 331–332, 359, 363, 380, 385, 399, 435, 497, 573, 578, 582–584, 604, 619–620, 624–626, 674, 694–695, 708–709, 725–726, 764, 766, 804, 806, 815–816, 834, 836, 909–917, 934–939, 958, 976, 986, 988, 1006–1007, 1009–1011, 1022–1023, 1026, 1028, 1047
TOTAL	16634	2628	84%

Python Unit Test Overview

Tests	Skipped	Failures	Errors	Time
2416	144 💤	0 ❌	0 🔥	1m 1s ⏱️

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[TaoChenOSU]

I really like where we are going. After the PR is merged and before the next release, we need to update our documentation.