These machines use a system similar to commercially used espresso equipment. The water is pumped from the water reservoir into a boiler where it is heated to just below boiling point for brewing espresso. A ready light will indicate when the water has reached the correct temperature for brewing espresso and it may toggle on and off during operation. This is normal and indicates that the heating element is maintaining the correct brewing temperature.
Once the coffee is brewed into a cup, and steamed milk is required to make cappuccino or latte, the steam switch is activated and the heating element switches to a high heat setting with the water in the boiler being super-heated to produce steam. A ready light indicates when the correct temperature for steaming has been reached. Steam accumulates in the top of the boiler and is not released through the steam pipe until the steam valve (knob or lever) is opened. A second thermostat maintains the high heat setting until you are ready to froth the milk. The pump does not operate in the steam mode of a pump boiler system, since steam collects at the top of the boiler.